NewKerala.com

RBI Governor Urges NBFCs to Monitor Asset Quality, Ensure Ethical Lending

RBI Governor Sanjay Malhotra met with chiefs of major NBFCs, HFCs, and microfinance institutions, stressing the need for robust underwriting and vigilant asset quality monitoring. He underscored the importance of customer-centricity, ethical conduct, and responsible lending practices for the sector's health. The meeting, attended by top RBI deputies, also covered policy feedback and the sector's role in credit flow. In a separate event, the newly constituted Payments Regulatory Board held its first meeting, reviewing payment systems and the draft Payments Vision 2028.

Key Points: RBI Governor Sanjay Malhotra's Directive to NBFCs on Asset Quality

  • Sound underwriting standards needed
  • Close monitoring of asset quality
  • Emphasis on ethical conduct and customer-centricity
  • Prompt grievance redressal for confidence
2 min read

RBI Governor tells NBFC chiefs to keep close watch on asset quality

RBI Governor Sanjay Malhotra emphasizes sound underwriting, ethical conduct, and customer grievance redressal for NBFCs to ensure sustainable growth.

"criticality of customer-centricity, ethical conduct, and responsible lending - RBI Governor Sanjay Malhotra"

Mumbai, Jan 5

RBI Governor Sanjay Malhotra on Monday underlined the need for sound underwriting standards and close monitoring of asset quality by NBFCs.

At a meeting held here with the Managing Directors and CEOs of select non-banking financial companies (NBFCs), including government NBFCs, housing finance companies (HFCs), and microfinance institutions, the RBI Governor further emphasised the criticality of customer-centricity, ethical conduct, and responsible lending.

He also highlighted the need for prompt grievance redressal of customers for preserving confidence in the NBFC sector and supporting its orderly and sustainable development.

The participating entities together account for about 53 per cent of NBFC sector assets. Industry participation included the representatives of Self-Regulatory Organisations, Sa-Dhan, the Micro Finance Institutions Network and the Finance Industry Development Council, according to an RBI statement issued after the conference.

In his opening remarks, the Governor highlighted the important role of NBFCs and HFCs in facilitating credit flow. During the discussion, participants shared feedback on policy issues and operational matters relating to the NBFC sector.

The meeting was also attended by Deputy Governors T. Rabi Sankar, Swaminathan J., Dr Poonam Gupta, and S. C. Murmu, and the MD & CEO of the National Housing Bank, apart from other senior officers of the Reserve Bank.

In a related development, the first meeting of the Payments Regulatory Board (PRB) on Monday was held here on Monday under the chairmanship of the RBI Governor. The PRB was constituted consequent to an amendment in the Payment and Settlement Systems Act, 2007, which came into effect on May 9, 2025.

The Board reviewed the functions of the Department of Payment and Settlement Systems and current focus areas covering both domestic and global payment systems. The draft Payments Vision 2028 was presented, and Members gave strategic guidance to ensure the continued development of India's payment ecosystem. A presentation on the major findings of the Survey on Digital Payments, recently conducted by RBI, was also made, the RBI statement said.

- IANS

Share this article:

Reader Comments

R
Rohit P
Good to see the focus on customer grievance redressal. Many times, customers feel helpless when dealing with financial institutions. A strong system will build trust. Hope they implement this seriously and not just on paper. 👍
A
Aditya G
The mention of "responsible lending" is key. In the race for growth, some NBFCs have been too aggressive, leading to stress for borrowers. Sound underwriting protects both the lender and the customer in the long run.
S
Sarah B
While the guidance is welcome, I hope the RBI also ensures a level playing field. Sometimes regulations for banks are very strict, but NBFCs have more leeway, which can lead to systemic risks. Consistent oversight is needed.
K
Karthik V
The Payments Vision 2028 meeting on the same day is interesting. Digital payments and credit flow are two pillars of financial inclusion. Coordinated regulation in both areas will help India's growth story. 🇮🇳
M
Meera T
Microfinance institutions were included, which is good. They serve the most vulnerable segments. Their asset quality needs special attention to prevent over-indebtedness in rural areas. Hope the feedback from Sa-Dhan was heard.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50