Reserve Bank of India (Non-Banking Financial Companies - Auditor’s Report) Directions, 2026

भारतीय ᳯरज़वर् बᱹक Reserve Bank of India

पयर्वेक्षण िवभाग, भारतीय ᳯरज़वर् बᱹक, कᱶᮤीय कायार्लय, मेकर टावर-ई, 20वᱭ मंिजल, कफ परेड, कोलाबा, मुंबई-400 005 दूरभाष: 022-6989 2022 ई-मेल: argdosco@rbi.org.in Department of Supervision, Reserve Bank of India, Central Office, Maker Tower-E, 20th floor, Cuffe Parade, Colaba, Mumbai- 400 005 Tel: 022-6989 2022 Email: argdosco@rbi.org.in ᳲहंदी आसान है, इसका ᮧयोग बढ़ाइए RBI/DoS/2026-27/468 DoS.CO.ARG.62/08.91.001/2026-27

July 31, 2026 Reserve Bank of India (Non-Banking Financial Companies - Auditor’s Report) Directions, 2026 Table of Contents Chapter I - Preliminary ............................................................................................. 2 A. Short Title and Commencement ..................................................................... 2 B. Applicability ..................................................................................................... 2 Chapter II - Auditors to submit Additional Report to the Board of Directors ...... 3 A. Auditor’s Report for All NBFCs ...................................................................... 3 B. Auditor’s Report for NBFCs accepting / holding Public Deposits .............. 4 C. Auditor’s Report for NBFCs Not accepting Public Deposits ....................... 6 D. Auditor’s Report for a Company engaged in the Business of Non-Banking Financial Institution Not required to hold Certificate of Registration subject to Certain Conditions ......................................................................... 8 E. Reasons to be stated by Auditors for Unfavourable or Qualified Statements ....................................................................................................... 8 Chapter III - Auditors to submit Exception Report to RBI ..................................... 9 A. Obligation of Auditor to submit an Exception Report to RBI ....................... 9 Chapter IV - Repeal and Other Provisions ........................................................... 10 A. Repeal and Saving ......................................................................................... 10 B. Application of Other Laws Not barred ......................................................... 10 C. Interpretations ................................................................................................ 11

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In exercise of the powers conferred under sub-section (1A) of Section 45MA of the Reserve Bank of India Act, 1934 (Act 2 of 1934) and of all the powers enabling it in this behalf, and in supersession of the Non-Banking Financial Companies Auditor’s Report (Reserve Bank) Directions, 2016, the Reserve Bank of India (RBI) being satisfied that it is necessary and expedient in public interest so to do, hereby issues the Directions hereinafter specified to every auditor of every non-banking financial company excluding Housing Finance Companies (HFCs). Chapter I - Preliminary A. Short Title and Commencement 1. These Directions shall be called the Reserve Bank of India (Non-Banking Financial Companies – Auditor’s Report) Directions, 2026. 2. These Directions shall come into effect immediately upon issuance. B. Applicability 3. These Directions shall be applicable to every auditor of a non-banking financial company as defined in section 45 I(f) of the Reserve Bank of India Act, 1934 (‘RBI Act’) other than those companies exempted by the Reserve Bank of India under section 45 NC of the said Act from applicability of the provisions of section 45-IA of RBI Act, (hereinafter collectively referred to as ’NBFCs and individually as a ‘NBFC’). The directions applicable to Statutory Auditors of HFCs shall continue to be governed by the relevant provisions of the Reserve Bank of India (Housing Finance Companies) Directions, 2025. 4. All other expressions unless defined herein shall have the same meaning as have been assigned to them under the RBI Act, the Banking Regulation Act, 1949, the Companies Act, 2013, or any statutory modification or re-enactment thereto or other regulations issued by RBI or the Glossary of Terms published by RBI or as used in commercial parlance, as the case may be.

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Chapter II - Auditors to submit Additional Report to the Board of Directors 5. In addition to the Report made by the auditor under Section 143 of the Companies Act, 2013 on the accounts of the NBFC examined for every financial year ending on any day on or after the commencement of these Directions, the auditor shall also make a separate report to the Board of Directors of the Company on the matters specified in the sections below. A. Auditor’s Report for All NBFCs 6. Material to be included in the Auditor’s report to the Board of Directors: The auditor’s report on the accounts of an NBFC shall include a statement on the following matters, namely: (1) Conducting non-banking financial activity without a valid Certificate of Registration (CoR) granted by RBI is an offence under Chapter V of the RBI Act, 1934. Therefore, if the company is engaged in the business of non- banking financial institution as defined in Section 45-I (a) of the RBI Act and meeting the Principal Business Criteria (financial asset / income pattern) as laid down vide RBI’s press release 1998-99 / 1269 dated April 08, 1999, Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 and directions issued by Department of Regulations (DoR) on Non- Reckoning of Fixed Deposits with banks as Financial Assets [Paragraph 21 of Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Directions, 2025], the auditor of the NBFC shall examine whether the company has obtained a CoR from RBI. (2) In case of a company holding CoR issued by RBI, whether that company is entitled to continue to hold such CoR in terms of its Principal Business Criteria (financial asset / income pattern) as on March 31 of the applicable year. (3) Whether the NBFC is meeting the required net owned fund requirement as laid down in Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation)

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Directions, 2025. Note: The NBFC shall enable its Statutory Auditors to submit ‘DNBS10 – Statutory Auditor’s Certificate (SAC) Return’ every year within five working days from the date of signing of the Auditor’s report in terms of Section 134 of the Companies Act, 2013, but not later than December 31st of same year. The Statutory Auditor shall verify that the NBFC is engaged in the business of non-banking financial institution requiring it to hold a CoR under Section 45-IA of the RBI Act and is eligible to hold it. The certificate from the Statutory Auditor in this regard with reference to the position of the NBFC as at end of the financial year ended March 31 shall be submitted in Centralised Information Management System (CIMS) portal of RBI, in terms of Reserve Bank of India (Non-Banking Financial Companies - Supervisory Returns) Directions, 2026. B. Auditor’s Report for NBFCs accepting / holding Public Deposits 7. Apart from the matters enumerated in Paragraph 6 above, the auditor shall include a statement on the following matters, namely: (1) Whether the public deposits accepted by the company together with other borrowings indicated below viz. (i) from public by issue of unsecured non-convertible debentures / bonds; (ii) from its shareholders (if it is a public limited company); and (iii) which are not excluded from the definition of ‘public deposit’ in the Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025, are within the limits admissible to the company as per the provisions of the Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025; (2) Whether the public deposits held by the company in excess of the quantum of such deposits permissible to it under the provisions of Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits)

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Directions, 2025 are regularised in the manner provided in the said Directions; (3) Whether the NBFC is accepting "public deposit” without minimum investment grade credit rating from an approved credit rating agency as per the provisions of Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025. (4) In respect of NBFCs referred to in Paragraph 7 (3) above, (i) whether any of the SEBI registered Credit Rating Agencies has assigned the credit rating, for each of the fixed deposits schemes; and (ii) whether the aggregate amount of deposits outstanding at any point during the year has exceeded the limit specified by RBI in terms of Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025; (5) Whether the company has violated any restriction on acceptance of public deposit as provided in Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025; (6) Whether the company has defaulted in paying to its depositors the interest and / or principal amount of the deposits after such interest and / or principal became due; (7) Whether the capital adequacy ratio as disclosed in the return submitted to the RBI in terms of the Reserve Bank of India (Non-Banking Financial Companies - Supervisory Returns) Directions, 2026 has been correctly determined and whether such ratio is in compliance with the minimum Capital to Risk-weighted Asset Ratio (CRAR) prescribed in Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025; (8) Whether the company has complied with the prudential norms on income recognition, asset classification, provisioning for bad and doubtful debts, as specified in the Directions issued by RBI in terms of the Reserve Bank