Chapter IIIB — Non-Banking Institutions and Financial Institutions

Section 45NC: Power of Bank to exempt

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 45NC empowers RBI, subject to the statutory conditions, to exempt a non-banking institution or class from all or specified provisions of Chapter IIIB, generally by notification/order and on conditions that may be imposed.

Operative provisionOfficial sources mappedProvision-specific decode

Finin2min - Section 45NC in 2 minutes

Legal effectSection 45NC empowers RBI, subject to the statutory conditions, to exempt a non-banking institution or class from all or specified provisions of Chapter IIIB, generally by notification/order and on conditions that may be imposed.

Operative ruleAn exemption is only as wide as its wording, entity class, period and conditions; it should not be extrapolated to unrelated provisions.

Connected lawCurrent registration/SBR Directions and exemption notifications are essential for perimeter analysis.

File evidenceRetain the exemption notification/order, eligibility facts, continuing conditions and review dates.

Statutory structure and clause / subsection decode

This map separates the operative limbs of this provision so thresholds, powers, conditions and exceptions are not collapsed into a single summary.

Rule 1

An exemption is only as wide as its wording, entity class, period and conditions

Rule 2

it should not be extrapolated to unrelated provisions.

Connected rule

Current registration/SBR Directions and exemption notifications are essential for perimeter analysis.

Worked practical example

Facts. An NBFC exempt from one registration or prudential requirement cannot assume it is also exempt from KYC, digital-lending or deposit restrictions unless the relevant instrument says so.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 45NC and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. Current registration/SBR Directions and exemption notifications are essential for perimeter analysis.
Do not convert an exception, exemption or discretionary RBI/Government power into an automatic entitlement. Record the authority, conditions and effective date.
Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.

Connected provisions and instruments

NBFC Registration, Exemptions and Scale Based Regulation — current frameworkCurrent operating framework is the RBI (NBFC – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025, amended in 2026; this existing Finin2min URL is retained.

Questions and answers

What is the purpose of Section 45NC?

Power of Bank to exempt: Section 45NC empowers RBI, subject to the statutory conditions, to exempt a non-banking institution or class from all or specified provisions of Chapter IIIB, generally by notification/order and on conditions that may be imposed.

Which statutory limb should be checked first?

Rule 1 - An exemption is only as wide as its wording, entity class, period and conditions

What is the next legal boundary?

Rule 2 - it should not be extrapolated to unrelated provisions.

What record should support the conclusion?

Section 45NC file evidence: Retain the exemption notification/order, eligibility facts, continuing conditions and review dates.

Primary sources

Source control for Section 45NC: use the official consolidated RBI Act for the statutory text and footnotes, then separately reconcile any post-Finance Act 2022 amendment, commencement notification or RBI instrument relevant to the event date.

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