Shastrartha 11: Master Directions -Fraud Risk Management for NBFCs

The Reserve Bank of India has recently issued new Master Directions on Fraud Risk Management for NBFCs superseding the erstwhile guidelines. The new Master Directions specifies provisions for governance structure, formation of special committee, implementing an early warning signal framework, reporting requirements, etc.

Following the Supreme Court ruling in State Bank of India & Ors. Vs. Rajesh Agarwal & Ors., these regulations lay emphasis on rules of natural justice before declaring an account as fraudulent, given that there are severe consequences of a borrower being declared fraudulent.

In this Shashtratha session, we aim to delve into the Master Directions, examining practical scenarios and their implications on NBFCs. Join us for an insightful discussion on navigating fraud risk management for NBFCs.


Please note:
NBFCs are allowed, for limited statistical / reporting purposes, to close those reported fraud cases involving amount upto ₹25 lakh, where examination of staff accountability and disciplinary action, if any, has been taken and:
(i) The investigation is going on or charge-sheet has not been filed in the Court by LEA for more than three years from the date of registration of First Information Report (FIR); or
(ii) The charge-sheet is filed by the LEAs in trial court and the trial in the court has not commenced or is pending before the court for more than three years from the date of registration of FIR.

In the video, inadvertently the speaker has mentioned more than ₹ 25 lakh


Our article on the revamped directions here: https://vinodkothari.com/2024/07/reva...