Current Affairs · Banking Regulations
Under the RBI Scale Based Regulation (SBR) framework, when a Middle Layer NBFC transitions to the Upper Layer due to systemic importance and interconnectedness, what are the key regulatory requirements it must comply with?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It must increase its Tier 1 capital to 9 percent immediately and list its shares within 12 months.
- 2It must submit a board-approved transition plan within 6 months, list its shares within 3 years, maintain Common Equity Tier 1 of 9 percent, and align with Large Exposure Framework limits.✓
- 3It must merge with its parent bank within 24 months as the Upper Layer does not permit standalone corporate NBFCs.
- 4It must convert into a Small Finance Bank within 18 months under the updated SBR financial directives.
Correct answer
It must submit a board-approved transition plan within 6 months, list its shares within 3 years, maintain Common Equity Tier 1 of 9 percent, and align with Large Exposure Framework limits.
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