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“Gujarat International Finance Tec-City (GIFT City) is emerging as a crucial global finance hub, attracting various financial and technology firms with its unique blend of regulatory advantages, tax...
Published On: 20/12/2024
Practice Area: Corporate & Commercial, Financial Services, Government & Regulatory
Authors:
The RBI has reportedly issued a directive requiring observers on the boards of NBFCs to be appointed as directors. This significant shift will affect how investors engage with the management of their NBFC portfolio. While the directive aims to ensure greater accountability, it raises important questions about the commercial rationale and regulatory risks matrix involved in the current split between voting nominee directors and non-voting observers, in effect highlighting the potential need for a more nuanced regulatory approach.
In this Info Alert, INDUSLAW’s Avimukt Dar, Sana Khan, and Sakshi Sharma, seek to analyze the implications of this change, considering both the risk management objectives and likely challenges for PE/VC investments in India’s NBFC sector.
