Scale Based Regulations

Prior approval of the Reserve Bank shall be obtained in cases of opening of branch/subsidiary/joint venture/representative office or undertaking investment abroad by NBFCs. No NBFC shall open subsidiaries/joint ventures/representative office abroad or shall make investment in any foreign entities without obtaining prior approval in writing from the Reserve Bank.

'Outsourcing' is defined as the NBFC’s use of a third party (either an affiliated entity within a corporate group or an entity that is external to the corporate group) to perform activities on a continuing basis that would normally be undertaken by the NBFC itself, now or in the future. ‘Continuing basis' includes agreements for a limited period.

Fair Practices Code NBFCs having customer interface shall adopt the following guidelines: For the purpose of this paragraph, the term ‘personal loans’ shall have the same meaning as defined in the Annex to the circular on ‘XBRL Returns – Harmonization of Banking Statistics’ dated January 04, 2018.

These Directions shall be called the Master Direction- Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023.