RBI Deputy Governor Swaminathan J urged non-bank firms to improve risk management. Liquidity and credit risks need stronger board oversight. Weak governance can worsen problems during market issues.
He spoke at an NBFC conference. Asset-liability mismatches require board attention. Funding sources and concentration risks also need watching. Strong internal controls are key.
Swaminathan J added NBFCs must treat customers fairly. This is true even while seeking growth and profit. NBFCs have become strong drivers of credit. They support banks and expand credit access. This is especially true for underserved groups.
NBFCs use tech and local knowledge for unique credit models. They design financial products for different borrower needs. Their speed and customer focus help the financial system. They complement banks and boost financial opportunities.
The Deputy Governor noted some NBFCs chase quick growth with poor practices. They use weak lending standards and high interest rates. These rates are hidden as fees. They then use harsh methods to collect debts.
“This model is not acceptable,” he stated clearly.
“Do not use financial inclusion as an excuse to exploit people. Commit to fairness in all dealings,” he urged.