Governor Shaktikanta Das Highlights Key Issues for NBFCs

9 Oct 2024 , 12:38 PM

Some non-banking financial companies (NBFCs) are aggressively seeking expansion without sufficient administration, according to Reserve Bank of India (RBI) Governor Shaktikanta Das, who announced the decisions during the bi-monthly Monetary Policy Committee (MPC) on Wednesday.

“They should review their target-based compensation structures,” Das said after announcing the rate-setting panel’s decision to maintain the repo rate at 6.5%.

Banks and NBFCs, for their part, must carefully analyse their particular exposures in the unsecured lending market, both in terms of size and quality, he stated.

“Their underwriting requirements and post-sanction monitoring must be robust. Potential hazards from inactive bank accounts, the cybersecurity landscape, mule accounts, and other factors must also be addressed.

Das said that the central bank is actively watching the incoming information and will take any required measures.

“NBFCs, in particular, have seen impressive growth in recent years.” This has resulted in increased loan flow to remote and underserved regions, hence boosting financial inclusion. “While the overall NBFC sector is healthy, I have a few messages for the outliers,” the RBI governor stated.

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