Economics · Financial Regulations
Considering the Scale-Based Regulation (SBR) framework introduced by the RBI for NBFCs, which of the following actions is a direct consequence of an NBFC moving into the Upper Layer (NBFC-UL) from the Middle Layer (NBFC-ML)?
- 1It is automatically granted a banking license.
- 2It becomes exempt from the mandatory registration requirement.
- 3It will be subjected to stricter regulatory requirements, including Common Equity Tier 1 (CET1) disclosures and higher capital adequacy.✓
- 4It is restricted from issuing any non-convertible debentures (NCDs).
Correct answer
It will be subjected to stricter regulatory requirements, including Common Equity Tier 1 (CET1) disclosures and higher capital adequacy.
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