Overview

• Nirmala Sitharaman urged NBFCs to avoid aggressive loan marketing, keep interest rates reasonable and conduct recovery in accordance with the RBI’s Fair Practices Code.
• The government set a goal for NBFCs to capture at least 50% of scheduled commercial bank lending and direct half of their credit to high-growth, high-impact sectors by India’s 100th anniversary of independence.
• New measures institutionalize co-lending partnerships between NBFCs and banks to improve priority sector lending and reduce unutilized funds returning to NABARD and SIDBI.
• DFS Secretary M. Nagaraju pledged a consultative policy process to resolve NBFC challenges related to bank dependence, liquidity pressures, taxation and governance.
• The sector’s loan book has doubled to ₹48 lakh crore, gross NPAs have fallen to 3% and return on assets has risen to 2.4% since March 2021.