BANKING AFFAIRS

Detailed explanation-1: -The Department of Non-Banking Supervision (DNBS) is entrusted with the responsibility of regulation and supervision of Non-Banking Financial Companies (NBFCs) under the regulatory-provisions contained under Chapter III B and C and Chapter V of the Reserve Bank of India Act, 1934.

Detailed explanation-2: -Though NBFCs come under the purview of the Companies Act, they are exempted from the above Rules since they come under RBI regulation under the Reserve Bank of India Act.

Detailed explanation-3: -The Banking Regulation Act, 1949 empowers the Reserve Bank of India to inspect and supervise commercial banks. These powers are exercised through on-site inspection and off site surveillance.

Detailed explanation-4: -Recently, the RBI has proposed a strict regulatory framework for the NBFCs by creating a four-tier structure with a progressive increase in regulation intensity. RBI has also proposed the classification of non-performing assets of base layer Non-Banking Financial Institutions from 180 days to 90 days overdue.