outline the features of the framework of regulation of the credit information companies in india.What are regulatory and Supervisory objecs of the RBI in relation to the NBFCs? Discuss the main elements of the RBI framework of NBFC regulation.
Answers
Answer:
The features of the framework of regulation of the credit information companies in India include:
Collect data about the people’s debt repayment history and giving inputs to the financial institutions
Information offered by credit unions will help banks to view the past repayment track record of the person
Four credit unions that are governed by RBI are –
• Credit Information Bureau (India) Limited (CIBIL)
• Equifax Credit Information Services Private Limited
• Experian Credit Information Company of India Private Limited
• CRIF High Mark Credit Information Services Private Limited.
Regulatory and Supervisor objectives of RBI in relation to NBFCs:
The Non-Banking Finance company has started to offer new financial services and products
NBFCs are connected to the entities in the financial industry
These companies are also exposed to risks related to liquidity and solvency
The main objectives are to:
• Address risks that arise
• Address regulatory gaps from different regulations
• Simplify regulations to promote smoother compliance culture
• Reinforce governance standards
The key elements of RBI framework of NBFC regulation are:
• Determination of NBFC
• Capital Adequacy ratio