RBI Sounds Alarm on Aggressive NBFC Growth: A Call for Responsible Practices

The Reserve Bank of India (RBI) has flagged risky business practices by some non-banking finance companies (NBFCs) under investor pressure pushing for aggressive growth. Governor Shaktikanta Das emphasized that while financial stability is not currently at systemic risk, the RBI will act if issues persist, urging NBFCs to adopt sustainable lending and risk management practices.

The Reserve Bank of India (RBI) has identified investor-driven aggressive growth in some non-banking finance companies (NBFCs) as leading to risky business practices.

Governor Shaktikanta Das warned that such practices could threaten financial stability, singling out microfinance institutions and housing finance companies.

RBI is prepared to intervene if these entities fail to self-correct, aiming for sustainable lending and strong risk management structures.

(With inputs from agencies.)