Concern was expressed against the increasing connections of banks and NBFCs

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MUMBAI: Expressing concern over the growing linkages between banks and non-banking financial companies (NBFCs), Reserve Bank of India (RBI) Governor Shaktikanta Das said that banks should continuously review their exposure to NBFCs. was An NBFCs receives funds from several banks.

Keeping in view the growing importance of NBFCs, there is a need to closely monitor the inter-linkages between banks and NBFCs.

NBFCs receive huge amounts of funds and do most of their borrowing from banks, Das said while speaking at an event.

The risks associated with such continuous connections do not appear to be pervasive. NBFCs should not depend only on banks for financing requirements

With credit growth accelerating, banks and NBFCs need to take special care to sustain credit growth. Every kind of exaggeration was to be avoided, the governor further said. Asset-liability management needs to be strengthened by banks and NBFCs.

New threats are emerging from time to time and new sources of threats are also created. Financial stability is a major support for the development of any country.

It may be mentioned here that the Reserve Bank last week took special measures against the rising proportion of unsecured loans by banks and NBFCs in the financial system of the country and increased the risk weight for banks and NBFCs.


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