November 7, 2020 1:33:43 am
Reserve Financial institution of India (RBI) Deputy Governor M Rajeshwar Rao on Friday stated non-banking monetary firms (NBFCs) with vital externalities and which contribute considerably to systemic dangers should be recognized and subjected to the next diploma of regulation.
Addressing a summit on NBFCs organised by Assocham, he stated one may also argue that the design of prudential regulatory framework for such NBFCs may be comparable with banks in order that past a degree of criticality to systemic dangers, such NBFC ought to have incentives both to transform right into a industrial financial institution or scale down its community externalities throughout the monetary system.
“This may make the monetary sector sound and resilient whereas permitting a majority of NBFCs to proceed beneath the regulation-light construction,” Rao additional stated.
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