What changed
The revised Master Circular updates the previous one from April 3, 2023, by incorporating all instructions issued up to April 23, 2024. It does not introduce any new guidelines but serves as a consolidated reference for existing regulations.
What it means for you
Banks must now refer to this updated circular for compliance with NBFC financing norms, including prudential ceilings and risk weights. The withdrawal of the NOF-linked ceiling for registered NBFCs continues, allowing need-based credit. No operational changes are required, but banks should ensure their policies align with the consolidated instructions.
What you must do
- Review the revised Master Circular and update internal policies to reflect the consolidated instructions.
- Ensure all NBFC financing activities comply with the updated prudential ceilings and restrictions.
- Train credit and risk teams on the consolidated guidelines to avoid non-compliance.
- Replace references to the April 2023 circular with this new version in all documentation.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Credit departments handling NBFC exposures, Risk management teams at banks
Does this circular introduce any new restrictions on bank finance to NBFCs?
No, it only consolidates existing instructions issued up to April 23, 2024, without adding new guidelines.
Which banks are covered under this Master Circular?
All Scheduled Commercial Banks except Regional Rural Banks (RRBs) must comply with these guidelines.
What is the key change from the previous Master Circular?
The circular updates the reference date to include instructions up to April 23, 2024, but no substantive changes were made to the regulatory framework.