CAIIB · ABM · Chapter 9

Role of Chief Compliance Officer

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.

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Q

What is Scale Based Regulation (SBR) for NBFCs and when did it become effective?

A

RBI's risk-tiered framework for NBFCs, effective October 1, 2022, placing entities into four layers based on size, activity, and riskiness.

Q

How are NBFC-UL entities identified under SBR scoring methodology?

A

Top 10 by asset size always included; next 50 ranked by total exposure including CEOBE using quantitative, qualitative, and supervisory judgment.

Q

What is the regulatory minimum Net Owned Fund (NOF) for NBFC-ICC, NBFC-MFI, and NBFC-Factor?

A

₹10 crore; for NBFC-P2P, NBFC-AA, and no public funds NBFCs, NOF remains ₹2 crore.

Q

What NPA classification timeline applies to Base Layer NBFCs?

A

Phased glide path to converge with bank-style 90-day overdue NPA norm; does not apply to those already at 90-day norm.

Q

What board experience requirement applies to all NBFCs under SBR?

A

At least one director must have relevant experience working in a bank or NBFC.

Q

What is the IPO subscription financing ceiling for all NBFCs?

A

Maximum ₹1 crore per borrower on financing subscription to Initial Public Offering.

Q

What minimum CET-1 capital ratio must NBFC-UL maintain?

A

9% of Risk-Weighted Assets (RWAs); stricter capital quality requirement than lower-layer NBFCs.

Q

How did SBR change concentration of credit/investment limits for NBFC-ML and NBFC-UL?

A

Previously separate lending/investment limits linked to Owned Fund; now merged into single exposure limit benchmarked to Tier-1 Capital.

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