The Reserve Bank of India (RBI) has intensified scrutiny on executive payouts in Non-Banking Financial Companies (NBFCs) following its April 2022 circular. This directive mandates NBFCs in the “middle” and “upper” tiers of the Scale-Based Regulatory (SBR) framework to adopt board-approved compensation policies, including remuneration committees and structured pay principles. Emphasizing variable pay linked to performance, the RBI aims for transparency and risk alignment, advocating deferrals for certain portions of variable compensation.
RBI Scrutinizes NBFC Executive Payouts Amid Regulatory Framework Updates
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