The Reserve Bank of India (RBI) Governor held a high-level meeting today with Managing Directors and Chief Executive Officers of select Non-Banking Financial Companies (NBFCs) in Mumbai. The meeting, which included participation from NBFCs across all layers, Housing Finance Companies, Micro-Finance Institutions, and Government NBFCs, focused on the sector’s growth, financial stability, and customer protection.
These NBFCs collectively account for nearly 50 percent of the total assets in the NBFC sector. Representatives from industry bodies such as Self-Regulatory Organizations (SROs), Sa-Dhan, Micro Finance Institutions Network (MFIN), and Finance Industry Development Council (FIDC) also participated in the discussions.
The meeting was part of the RBI’s ongoing engagement with the boards and senior management of its regulated entities. The previous meeting with NBFCs was held on August 25, 2023. Senior RBI officials, including Deputy Governors M. Rajeshwar Rao, T. Rabi Sankar, and Swaminathan J., along with Executive Directors overseeing regulation, supervision, and financial inclusion, were present.
In his opening remarks, the Governor emphasized the critical role of NBFCs in credit intermediation, particularly in extending credit to small businesses and niche sectors. He highlighted the need to balance growth aspirations with robust operational practices to ensure inclusive development and safeguard financial stability.
“NBFCs play a crucial role in financial inclusion. While growth is essential, it should be accompanied by sound practices that prioritize customer protection and ensure financial system stability,” the Governor stated. He stressed the importance of implementing a prompt grievance redress mechanism to enhance customer trust.
The Governor also urged NBFCs to actively participate in the Unified Lending Interface (ULI), a new RBI initiative designed to streamline and simplify credit access.
The meeting featured an interactive session where industry leaders shared insights on sectoral trends, ongoing industry-level initiatives, and their expectations from the central bank. Participants acknowledged the RBI’s proactive engagement with the sector and expressed optimism about future growth prospects under a stable and transparent regulatory environment.
The RBI continues to focus on fostering a resilient and inclusive financial ecosystem, with NBFCs playing a pivotal role in achieving this objective.