Inside The NBFC And CIC Framework: Tug Of War Between The 50-50 And 90-60 Tests

I. Introduction

The Reserve Bank of India ("RBI") was established under the Reserve Bank of India Act, 1934 ("RBI Act") to act as India's central monetary authority, regulate the issuance of bank notes, maintain reserves to secure monetary stability in India, regulate the monetary policy framework, and operate the currency and credit system to the country's advantage.¹

Traditionally, the responsibility for facilitating routine monetary operations in India has rested with banks, which are regulated by the RBI. Banks accept deposits from the public and regulate the payment and settlement system. They play a key role in meeting the financing and credit requirements of individuals and businesses.²