RBI Invites Public Comments On Draft Amendments For NBFCs & ARCs

New Delhi, Jan 14 (KNN) The Reserve Bank of India (RBI) has released Draft Amendment Directions seeking to clarify the computation of Owned Fund and Tier 1 Capital for non-banking financial companies (NBFCs) and asset reconstruction companies (ARCs), and their applicability to credit and investment concentration norms.

The amendments propose updates to multiple existing master directions, covering areas such as prudential norms for NBFCs, concentration risk management for NBFCs, regulations for Housing Finance Companies, Core Investment Companies, Mortgage Guarantee Companies, Asset Reconstruction Companies, and Standalone Primary Dealers, all issued in 2025.

These revisions, issued as second amendment directions in 2026, aim to address representations fr0m NBFCs requesting clarifications on the computation of Tier 1 Capital and Owned Fund for compliance with concentration norms.

Currently, NBFCs (excluding those in the upper layer) and ARCs calculate Tier 1 Capital as on March 31 of the previous financial year for this purpose.

The RBI has invited stakeholder feedback on the draft amendments until January 28, 2026. Comments can be submitted via the ‘Connect 2 Regulate’ portal on the RBI website or directly to the Department of Regulation at the RBI’s Central Office in Mumbai, including by email.

The central bank said the proposed amendments are intended to clarify existing provisions, ensure consistency in capital computation, and support effective risk management for NBFCs and ARCs under prudential and concentration norms.

(KNN Bureau)