RBI Engages NBFCs On Fair Practices, Financial Inclusion, & Lending Reforms

New Delhi, Feb 14 (KNN) Reserve Bank of India (RBI) Governor Sanjay Malhotra convened a significant meeting with senior leadership of select non-banking financial companies (NBFCs) on Thursday, emphasising the critical importance of fair customer treatment and efficient grievance redressal mechanisms. 

The high-level consultation included managing directors and chief executive officers fr0m various NBFC segments, representing approximately half of the sector's total assets.

During his opening remarks, Governor Malhotra highlighted the vital role NBFCs play in credit intermediation, particularly emphasising their contribution to financing small businesses and serving niche market segments. 

The Governor articulated a vision for balanced growth, emphasising the necessity of maintaining sound practices while pursuing expansion objectives to ensure inclusive development, customer protection, and financial stability.

In a significant policy directive, Malhotra urged NBFCs to enhance their participation in financial inclusion initiatives, specifically calling for their integration with the Reserve Bank's upcoming Unified Lending Interface (ULI). 

This technological advancement represents a strategic step toward modernising India's lending infrastructure and improving access to financial services.

The meeting, which included representatives fr0m various self-regulatory organisations including Sa-Dhan, Micro Finance Institutions Network (MFIN), and the Finance Industry Development Council (FIDC), provided a platform for constructive dialogue between the regulator and industry participants. 

The gathering was further strengthened by the presence of RBI's senior leadership, including deputy governors M Rajeshwar Rao, T Rabi Sankar, and Swaminathan J, along with Executive Directors responsible for regulation, supervision, and financial inclusion.

This consultation marks the latest in RBI's ongoing series of engagements with its regulated entities, following a previous meeting with select NBFCs held on August 25, 2023. 

The interactive session facilitated valuable feedback fr0m industry participants regarding sector-specific initiatives and their expectations fr0m the central bank, reinforcing the collaborative approach to financial sector development.

The comprehensive representation at the meeting, including government NBFCs, housing finance companies, and microfinance institutions, underscores the RBI's commitment to maintaining a robust dialogue with all segments of the financial sector while ensuring adherence to regulatory standards and customer protection principles.

(KNN Bureau)