RBI meets NBFCs, HFCs; urges them to maintain sound underwriting standards

The Reserve Bank of India (RBI) emphasised on the robust underwriting practices and careful asset quality oversight during a meeting with managing directors and chief executive officers of select non-banking financial companies (NBFCs) and housing finance companies (HFCs) in Mumbai on Monday. 

The session, part of the RBI's continued engagement with regulated entities, brought together leaders of institutions accounting for around 53 per cent of the NBFC sector’s assets, highlighting the significance of the discussions for the industry at large.

In his opening remarks, RBI Governor Sanjay Malhotra underlined the need for sound underwriting standards and close monitoring of asset quality. The Governor further highlighted the critical role played by NBFCs and HFCs in ensuring credit flow throughout the economy. 

The RBI stressed on the “criticality of customer-centricity, ethical conduct and responsible lending along with prompt grievance redressal for preserving confidence in the sector and supporting its orderly and sustainable development."

Industry representation at the meeting included self-regulatory organisations, Sa-Dhan, the Micro Finance Institutions Network, and the Finance Industry Development Council. Senior officials such as Deputy Governors T Rabi Sankar, Swaminathan J, Dr Poonam Gupta and SC Murmu, along with the MD and CEO of the National Housing Bank, also attended the meeting.

Leaders from participating entities discussed policy issues and operational matters affecting NBFCs. During the discussion, participants shared feedback on policy issues and operational matters relating to the NBFC sector.

This gathering follows a similar meeting held on February 13, 2025, to strengthen the RBI’s ongoing dialogue with the sector.