RBI Governor Warns NBFCs Against Unsustainable Growth Practices

RBI Governor Shaktikanta Das has issued a warning to non-banking financial companies (NBFCs) against pursuing unsustainable growth practices. Stressing the importance of sustainable business goals and strong risk management, he highlighted the issues surrounding high interest rates and aggressive growth tactics that could harm financial stability.

The Reserve Bank of India (RBI) Governor, Shaktikanta Das, has issued a stern warning to non-banking financial companies (NBFCs) engaging in aggressive, unsustainable growth practices.

In his statement during the bi-monthly policy review, Das stressed the need for NBFCs, including microfinance institutions and housing finance companies, to adhere to sustainable business practices, compliance, and risk management.

Das expressed concerns over high interest rates and aggressive growth driven by business targets, which could pose financial stability risks. He urged NBFCs to review staff compensation and incentive structures to prevent adverse work culture and poor customer service.

(With inputs from agencies.)