Business Standard

Disciplining NBFCs

RBI's draft rules will help reboot the sector

Reserve bank of India

Reserve bank of India

Business Standard Editorial Comment New Delhi
The Reserve Bank of India’s (RBI’s) proposal to introduce liquidity buffers for non-banking financial companies (NBFCs) may restrict their ability to lend, but this short-term pain is necessary to make the sector more responsible. NBFCs did play a critical role by partially filling the vacuum created by the trouble in public sector banks (PSBs) and increasing their geographical reach via swift adoption of new technologies. As a result, the share of NBFCs in total loans rose to 23 per cent in FY19 from just 13 per cent in FY12 — a period that saw a sharp erosion in PSB lending.

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First Published: May 30 2019 | 1:01 AM IST

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