Upon completion of this course, participants will be able to:

• Apply **adapted financial ratios and analytical techniques** for assessing the capital adequacy and solvency of diverse NBFI types.
• Conduct rigorous **asset quality assessments** specific to NBFI portfolios, including unique loan types and off-balance sheet exposures.
• Implement effective **liquidity stress testing methodologies** and monitor funding profiles unique to non-deposit-taking NBFIs.
• Evaluate the **earnings sustainability and profitability drivers** of various NBFIs, considering fee-based and lending models.
• Perform comprehensive **off-site surveillance and on-site examination** procedures for compliance with prudential regulations.
• Develop **early warning indicators** and risk matrices tailored to the specific operational and market risks of the NBFI sector.
• Understand and apply the appropriate **International Financial Reporting Standards (IFRS)** for NBFI balance sheet analysis.
• Formulate corrective action and supervisory recommendations based on quantitative analysis findings.

• Prudential Supervisors and Examiners of Non-Bank Financial Institutions.
• Financial Analysts and Economists in Regulatory Authorities.
• Risk Managers and Compliance Officers at NBFIs.
• Internal Auditors focused on NBFI Financial Statement Integrity.
• Regulatory Policy Developers specializing in the Non-Bank Sector.
• Financial Stability and Systemic Risk Assessment Staff.

• Case Studies on Major NBFI Failures and Root Cause Analysis
• Group Activities on Applying Adapted Financial Ratios to Sample NBFI Financial Statements
• Liquidity Stress Testing Simulation Workshops using Real-World Scenarios
• Expert Lectures on IFRS 9 and its Application to NBFI Loan Loss Provisioning
• Individual Exercises on Developing Risk-Based Surveillance Checklists

Unit 1: Foundations of NBFI Regulation and Risk Profile

• Defining the scope and diverse types of NBFIs (e.g., finance companies, factoring, microfinance).
• Identifying the unique risk profile of NBFIs compared to commercial banks (e.g., funding, concentration).
• Review of the core **prudential requirements** applicable to NBFIs (e.g., capital, leverage limits).
• Mapping the regulatory perimeter and the challenges of shadow banking oversight.
• International standards and recommendations for NBFI supervision (e.g., FSB, Basel applicability).

Unit 2: Capital and Asset Quality Assessment

• Adapting **capital adequacy ratios** (e.g., leverage) for NBFIs lacking deposit-based funding.
• Methodologies for calculating and assessing credit risk reserve requirements and provisioning.
• Analyzing **asset quality metrics** (e.g., NPL ratios, loan loss coverage) in specialized NBFI portfolios.
• Evaluating the risk associated with structured finance, leasing, and trade credit exposures.
• Protocols for on-site verification of loan classification and collateral valuation.

Unit 3: Liquidity and Funding Risk Analysis

• Understanding the reliance on wholesale funding and capital markets for non-deposit-taking NBFIs.
• Designing and implementing robust **liquidity stress tests** tailored to rapid funding withdrawal scenarios.
• Analyzing maturity mismatches, concentration in funding sources, and the use of contingent liquidity lines.
• Monitoring key liquidity metrics (e.g., liquid assets to short-term funding) and early warning triggers.
• The role of the central bank as the lender of last resort for NBFIs and associated policy.

Unit 4: Earnings, Profitability, and Sustainability

• Analyzing the core profitability drivers of various NBFI business models (e.g., high-margin/high-risk vs. fee-based).
• Evaluating the quality and sustainability of earnings, separating recurring income from one-off gains.
• Assessing the adequacy of operational cost controls and expense ratios for efficiency.
• Using **peer group analysis** to benchmark NBFI financial performance and identify outliers.
• Protocols for assessing internal capital generation and dividend policies.

Unit 5: Supervisory Tools and Corrective Action

• Developing the **off-site surveillance framework** using standardized data collection templates.
• Designing the scope and focus of the **on-site examination** for high-risk NBFIs.
• Protocols for communicating analysis findings and risk ratings to NBFI management.
• Formulating and enforcing **corrective action plans** (CAPs) for breaches of prudential limits.
• The legal and policy process for escalating supervisory intervention, including licensing revocation.