Q6 · UPSC current affairs · 16 September 2026 · News · RBI NBFC Upper Layer Listing Rules

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What is the primary objective of introducing 'Scale-Based Regulation' for NBFCs by the Reserve Bank of India?

A To completely abolish private non-banking financial institutions
B To align supervisory intensity with the systemic risk profile of NBFCs
C To merge all upper-layer NBFCs into public sector banks
D To restrict NBFCs from operating outside urban metropolitan areas

Correct answer: (b) To align supervisory intensity with the systemic risk profile of NBFCs

Explanation

Option B is correct because Scale-Based Regulation is designed to align regulatory and supervisory intensity with the systemic risk profile of various NBFCs. The other options describe actions not supported by the RBI's regulatory framework.

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