look news india
Mumbai: RBI Governor Shaktikanta Das has warned of strict action against non-banking financial companies (NBFCs) adopting lean methods for growth. Impractical development methods may prove counterproductive.
Announcing a bi-monthly review of monetary policy, the Governor has asked NBFCs to adopt appropriate and sustainable policies.
Acknowledging that the NBFC sector has made impressive progress over the years, Das said the sector has played an important role in achieving the goal of financial inclusion.
But in the course of growth, some NBFCs were found adopting unsustainable business activities, the Governor said. Impractical growth methodology at any cost ultimately proves counterproductive for such companies. There are financial risks involved.
He said NBFCs, including microfinance institutions and housing finance companies, need to develop a culture of compliance, strong risk management framework, proper standards of performance and serious handling of customer complaints.
The Reserve Bank keeps a constant eye on all these matters and will not hesitate to take appropriate action if necessary. RBI wants NBFCs to remain self-disciplined.