CURRENT AFFAIRS

Detailed explanation-1: -Recently, the Reserve Bank of India (RBI) has proposed a tighter regulatory framework for Non-Banking Financial Companies (NBFCs) by creating a four-tier structure with a progressive increase in intensity of regulation.

Detailed explanation-2: -The framework categorises NBFCs in Base Layer (NBFC-BL), Middle Layer (NBFC-ML), Upper Layer (NBFC-UL) and Top Layer (NBFC-TL).

Detailed explanation-3: -The Reserve Bank has been given the powers under the RBI Act 1934 to register, lay down policy, issue directions, inspect, regulate, supervise and exercise surveillance over NBFCs that meet the 50-50 criteria of principal business.

Detailed explanation-4: -The Audit Committee constituted by an NBFC as required under Section 292-A of the Companies Act, 1956 shall also be the Audit Committee for the purposes of RBI Regulations this paragraph and shall have the same powers, functions, duties as laid in Companies Act, 1956.

Detailed explanation-5: -The banking system in India is regulated by the Reserve Bank of India (RBI), through the provisions of the Banking Regulation Act, 1949.