Page 47 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) 23062 COPY.indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
nd
th
b) Principles for Fixed / Variable pay These guidelines will be applicable for fixing
Structures, and the Compensation Policy of Key Managerial
Personnel Non-Banking Financial Companies
c) Mauls / Clawback Provisions.
under the SBR framework, except those
The Board of NBFCs should delineate the role of categorized under ‘Base Layer’ and members
various committees, including the Nomination of Senior Management of all Government-
and Remuneration Committee (NRC). owned NBFCs.
RBI Guidelines are intended only for providing Role of NRC:
broad guidance to NBFCs and their NRCs in The Boards of all Non-Banking Financial
formulating their Compensation Policy. While Companies which are applicable will constitute
formulating the Compensation Policy, NBFCs a NRC (Nomination and Remuneration
to be ensured that all statutory mandates and Committee). The NRC shall have the
the Rules and Directions issued under them are Constitution, Powers, Functions, and Duties
fully complied with. as laid down in section 178 of the Companies
Act, 2013.

The NRC, inter alia, shall also have the man-
date to oversee the:

 Framing.

 Review and

 Implementation.

Of the Compensation Policy of the Company Directors on the Board of the Company, KMPs,
which should have the approval of the board. and Senior Management (‘Senior Management
is the same as defined in ‘Explanation’ to
The NRC may work in close Co-ordination Section 178 of the Companies Act, 2013).
with the Risk Management Committee (RMC)
of the Company to achieve effective alignment Principles for Compensation:
between compensation and risks. Further, the a) Components and Risk Alignment:
NRC may ensure that Compensation Levels are The Compensation of Key Managerial
supported by the need to Retain Earnings of the Personnel (KMPs: As defined in Section
Company and the need to maintain Adequate 2 (51) of the Companies Act, 2013, as
Capital Based on the “Internal Capital amended from time to time.) and Senior
Adequacy Assessment Process (ICAAP)”. Management needs to be Reasonable,
recognizing all relevant factors including
NRC may also ensure the ‘Fit and Proper’ status adherence to Statutory requirements and
of proposed / existing Directors and that there Industry Practices. The Compensation
is no conflict of interest in the Appointment of
Packages May Comprise Fixed and

The Institute Of Cost Accountants Of India

47