Reserve Financial institution of India stated on Thursday that non-banking finance companies with asset measurement of greater than Rs 5,000 crore ought to appoint a chief threat officer.
The federal government took management of IL&FS final yr after its default triggered fears about contagion in India’s monetary sector.
“With the increasing role of NBFCs in direct credit intermediation, there is a need for NBFCs to augment risk management practices,” the central financial institution stated in a press release.
Reserve Financial institution of India stated on Thursday that shadow banks often known as non-banking finance firms (NBFC) with asset measurement of greater than Rs 5,000 crore ought to appoint a chief threat officer (CRO) in a transfer to tighten regulation after a sequence of defaults at high lender Infrastructure Leasing & Monetary Companies (IL&FS).
The CRO shall be a senior official within the hierarchy of an NBFC and shall possess enough skilled qualification or expertise within the space of threat administration, RBI added.
An independently functioning chief threat officer with clearly specified position and duties must be appointed by the NBFCs, the Reserve Financial institution of India stated.
The central financial institution stated that the chief threat officer must be appointed for a hard and fast tenure and can’t be eliminated with out board’s approval of the NBFC.