Scale-based regulatory framework for NBFCs optimal approach: RBI Deputy Guv

"Developments around harsh recovery practices, breach of data privacy of digital lenders has dented the credibility of the whole system," Rao said

While differential regulation in the shadow banking sector is justified till the time the scale of operations of finance companies is low, as and when they attain size and complexity that poses a risk to the financial system as a whole, it becomes very important to increase regulatory oversight over the sector, said Reserve Bank of India’s (RBI) Deputy Governor M Rajeshwar Rao.

“...it is in this background that we have conceptualised the scale-based regulatory