RBI Issues New Directions On Fraud Risk Management For NBFCs & HFCs

The RBI has issued new guidelines for fraud risk management applicable to NBFCs and HFCs. These directives emphasize the need for robust internal systems, including risk assessment procedures and fraud monitoring mechanisms. NBFCs and HFCs must establish board-approved policies and frameworks for fraud risk management, ensuring timely reporting and mitigation strategies. The guidelines also stress the role of senior management in overseeing these measures to ensure compliance and effectiveness in combating fraud. These regulations aim to strengthen the financial system's resilience against fraud risks in non-banking financial sectors.