RBI to revise NBFC asset-liability norms over borrowing, lending mismatch

Defaults by IL&FS points to a larger issue

The Reserve Bank of India (RBI) on Friday said it will revise the asset-liability guidelines for non-banking financial companies (NBFCs), as there have been recent concerns over mismatches between their borrowings from the short-term money market and their lending practices.

The Monetary Policy Committee (MPC) of the RBI on Friday decided to keep the repo rate unchanged at 6.5 per cent. Almost as a response, the stock markets tanked and the rupee fell to an all-time low of 74 per dollar.

Several NBFC stocks were also affected, especially after the RBI issued warnings about their sources of funding and asset-liability