Economics · Financial Sector Reforms
The evolution of NBFCs in India saw a major regulatory shift following the 1997 'Residuary Non-Banking Company (RNBC)' crisis. What was the most significant regulatory action taken by the RBI to enhance depositor protection?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The RBI transferred the regulation of deposit-taking NBFCs entirely under the control of SEBI.
- 2The RBI mandated compulsory registration and significantly increased the Net Owned Fund (NOF) requirement for accepting public deposits.✓
- 3The RBI introduced a 'Triple Regulation' mechanism managed jointly with state governments.
- 4The RBI completely banned all NBFCs from accepting any form of public deposits.
Correct answer
The RBI mandated compulsory registration and significantly increased the Net Owned Fund (NOF) requirement for accepting public deposits.
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