RBI framework, pricing and compliance
Banking and financial-services regulation in India is principally governed by the Reserve Bank of India under the RBI Act 1934, the Banking Regulation Act 1949, the Payment and Settlement Systems Act 2007 and the directions and circulars issued by the RBI. NBFCs are regulated under Chapter IIIB of the RBI Act and the NBFC Master Directions. The SARFAESI Act 2002, the Recovery of Debts and Bankruptcy Act 1993 (DRT), and the IBC 2016 provide the enforcement and recovery framework. AMLEGALS advises banks, NBFCs, fintech companies, borrowers and guarantors on regulatory compliance, lending documentation, enforcement and defence.
Fintech and digital-lending entities are subject to the RBI’s Digital Lending Guidelines (September 2022), the directions on first-loss default guarantee, the payment-aggregator and prepaid-instrument regulations, and the data-localisation requirements for payment-system operators. AMLEGALS advises on licensing, regulatory structure and ongoing compliance for entities operating in the regulated financial space.
Advising banks, NBFCs and fintech entities on the regulatory framework for RBI licensing (NBFC registration, payment-aggregator authorisation, PPI licence), eligibility conditions, master-direction compliance and the reporting framework.
Drafting and reviewing facility agreements, security documents (hypothecation, mortgage, pledge, guarantee), sanction letters and term sheets for banks and NBFCs.
Acting for secured creditors and borrowers in SARFAESI proceedings (Section 13(2) demand, Section 13(4) enforcement, DRT appeal) and recovery applications before the Debts Recovery Tribunal.
Advising digital-lending platforms on the RBI Digital Lending Guidelines, FLDG arrangements, co-lending structures and fair-practices-code compliance.
Advising on NPA classification (RBI prudential norms), provisioning, one-time settlement, assignment of stressed assets and IBC referral strategy.
Advising on FEMA compliance for trade finance, ECB, buyers’-credit arrangements and the liberalised remittance scheme.
Under Section 13(2) of the SARFAESI Act 2002, a secured creditor issues a demand notice to the borrower requiring repayment within 60 days. If the borrower fails to pay, the secured creditor may take possession of the secured asset, sell or lease it, or appoint a manager, under Section 13(4). The borrower may file an application to the DRT under Section 17 to challenge the action.
Digital-lending platforms that partner with regulated entities (banks or NBFCs) as lending service providers (LSPs) do not need a separate RBI licence, but must comply with the RBI’s Digital Lending Guidelines. Entities that lend from their own balance sheet must obtain an NBFC registration from the RBI.
Under the RBI’s prudential norms, a loan account is classified as a non-performing asset (NPA) when interest or principal remains overdue for more than 90 days (for term loans) or when the account remains out of order for more than 90 days (for cash-credit and overdraft facilities).
Yes. A borrower may file an application before the Debts Recovery Tribunal under Section 17 of the SARFAESI Act 2002 within 45 days of receiving the possession notice. The DRT may set aside or modify the secured creditor’s action if the statutory requirements are not met.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing. An initial discussion is confidential and is used only to understand the matter and assess fit.
Share the key facts for a confidential preliminary assessment of your India matter.