Take care of NBFCs

Tighter regulation is important, but so is the timing

Regulation of non-banking financial companies (NBFCs) is reportedly being significantly tightened soon, with the Reserve Bank of India (RBI) reviewing their reporting and financing requirements. There are more than 10,000 NBFCs, but the focus of the RBI will be on those that affect systemic stability. For some years now, NBFCs defined as “large” — with assets of more than Rs 5 billion — and that are systemically important have been subject to differing requirements. That will likely now kick up a notch, bringing their regulatory status close to that of banks. A ceiling may be placed on their financing by