NBFC Independent Director

NBFC Independent Director

RBI expects NBFCs to be well-governed, transparent, and accountable—especially when they handle borrower money, investor funds, and sensitive customer data. An independent director strengthens that framework. They bring external oversight, challenge decisions when needed, protect stakeholder interest, and ensure compliance doesn’t become a checkbox exercise.

We help NBFCs identify, appoint, and structure the role of independent directors who meet regulatory, ethical, and governance expectations.

What We Assist With

Eligibility & Screening

• Fit-and-proper criteria verification

• Background, integrity, and financial soundness checks

• Experience mapping based on business model

Appointment & Documentation

• Board and shareholder resolutions

• Consent, disclosures, DIR forms, declarations

• Terms of appointment and role charter

Regulatory Compliance

• RBI corporate governance requirements

• Companies Act appointment and reporting

• Register updates, filings, committee constitution

Governance Integration

• Audit, risk, nomination, and remuneration committees

• Evaluation frameworks and board reporting

• Policy review and strategic oversight support

Responsibilities of an Independent Director

• Ensure ethical lending, fair practices, and customer protection

• Review risk management, underwriting, recovery, and KYC/AML controls

• Oversee financial reporting integrity and internal audit findings

• Protect minority and public stakeholder interest

• Question high-risk decisions, related party dealings, and exposure levels

• Promote transparency, accountability, and long-term governance

They are not operators—they are overseers.

Eligibility Snapshot

• Not a promoter, employee, lender, consultant, auditor, or close relative of management

• No material financial relationship with the company or group

• Proven expertise in finance, banking, law, risk, audit, or governance

• Meets RBI fit-and-proper and Companies Act criteria

Documents Usually Required

• DIN, PAN, Aadhaar, updated CV and qualifications

• DIR-2, DIR-8, declaration of independence

• Consent letters, conflict-of-interest disclosures

• Board and shareholder approval records

Why NBFCs Need Independent Directors

• Stronger governance and regulatory credibility

• Better preparedness for RBI inspections

• Balanced decision-making and risk oversight

• Improved investor, lender, and rating agency confidence

• Helps prevent compliance lapses and reputational damage