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RBI Draft: Small NBFCs Exempt From Registration (Type I)

11 February 20261 min read
BANKING & FINANCERBI Draft: SmallNBFCs ExemptFrom Registration(Type I)11 February 2026safalsetu.com

Why in the news

The RBI issued draft directions to free low-risk small NBFCs from compulsory registration because their systemic impact is limited.

Rationale

  • They mostly invest their own money, pose minimal systemic risk and need no customer protection.
  • Aim: lighter compliance and ease of doing business.

Definitions

TermCovers
Public fundsOutside money, indirect funds via associates or group firms, and loans from directors or shareholders
Customer interfaceLending, guarantees, financial products or services, dealings with group entities, directors or shareholders; employee loans on employment terms excluded

Background: SBR

The Scale-Based Regulatory Framework (October 2021) sorts NBFCs into Base (Type I), Middle, Upper and Top layers. The base layer was seen as low-risk, and this draft acts on that view.

Exam angle

  • Threshold: ₹1,000 crore assets.
  • Base layer is Type I.

Test yourself

1. Under RBI's draft, NBFCs with assets below what amount, no public funds and no customer interface may skip registration?

The asset limit is below ₹1,000 crore.

2. What would the exempt entities in RBI's draft be called?

The draft names them Unregistered Type I NBFCs.

3. RBI's Scale-Based Regulatory Framework for NBFCs was introduced in which month and year?

The notes state it started in October 2021.

This topic is part of Daily Current Affairs 11 February 2026 (15 topics).

All topics of the dayDay quizFebruary 2026

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