Certain issues regarding the scale-based regulation framework for non-banking financial companies laid out by the Reserve Bank of India are scrutinised. These pertain to divergence with globally adopted definition of systemically important and differences in the usage of two literally identical terms, namely systemically important and systemically significant, by the RBI, coupled with irregularities in the measurement of perceived riskiness, the adoption of the binary concept rather than the continuum concept of systemically important NBFCs with regard to top 10 asset size-based inclusion in the upper layer, inclusion of systemically significant NBFCs for a minimum period of five years, supervision on calibrated increment of business, and the relevance of the top layer.
