NBFC – Frequently Asked Questions – RBI
Indian Financial System (including Banks and Non-Banks) is considered to be robust; may be due to its conservative approach. But some times some public / private banks or NBFCs (later, it bacame the most hot four letter word) have been aggressive and tasted success or vanished from the scene. At least in the post reforms era, while the Public Sector Banks were streamlining themselves to conform to the RBI guidelines on Prudential Norms, etc., an excellent opportunity was grabbed by NBFCs to mushroo and squeeze the economy. Very soon, of course the saturation point emerged with CR Bhansali's scam surfacing. RBI and Govt got alerted and asked Vasudev and Committee to examine the NBFCs industry to caution the investing public. The euphora came down and the industry checked as also the banking system almost stabilised.
And now, we are witnessing the mushrooming of MFIs. One of them has already gone public and the response was amazing. RBI is opening discussion as to how to keep a watch on their activities and collaborate with the GOI and SEBI to check MFIs. A bill dealing with all aspects of MFIs in India is pending with the Babus and Parliamentarians. We wish they act fast before another major problem erups in the finance world.