RBI eases rules for small NBFCs; exemptions effective 1 July 2026

What: RBI amended NBFC registration/exemption framework (Scale Based Regulation amendment directions, 2026): entities not availing public funds and without customer interface and assets < Rs 1,000 crore classified as ‘Unregistered Type I NBFCs’ exempted from registration; one‑time exit window till 31 Dec 2026; directions permit suo motu loan resolution in calamities.

Significance: Reduces compliance burden for small non‑public NBFCs, enables structured exit, and provides flexibility for calamity relief — balancing sector growth with prudential oversight.

UPSC relevance: Financial regulation, NBFC sector, macro‑prudential policy.

Practice Q: Evaluate the regulatory trade‑offs in easing registration norms for small NBFCs.