Apart from the general requirements, two recommendations are noteworthy. The first provides that the benefits of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (SARFAESI Act) must be made available to NBFCs such that they are able to enforce their security interests utilising the favourable provisions of the Act. Currently, the benefit of the SARFAESI Act is available only to Indian banks and certain financial institutions. The second is that all NBFCs with assets of Rs. 1000 crores and above, whether listed or not, must comply with clause 49 of the listing agreement prescribed by SEBI for corporate governance and disclosure. This will bring even unlisted NBFCs on par with public listed companies in terms of corporate governance norms that will compel them to comply with requirements on board independence, audit committee, periodic financial disclosures, and the like. It is interesting to see an incorporation (by reference) of the SEBI corporate governance norms to the regime governing NBFCs (that includes unlisted ones as well).
Although the recommendations of the committee are far-reaching in nature, there is no clarity on whether and when they will be adopted and implemented. For instance, some of the changes will require amendment to legislation (e.g. SARFAESI Act and the RBI Act). However, the report represents and indication of the direction in which the regulatory regime governing NBFCs is likely to move in the near future.