INSUBCONTINENT EXCLUSIVE:
Non-Banking Finance Companies (NBFCs) received lessons on asset-liability management from the central bank Friday after a series of ILFS
defaults led to a near seizure of short-term money markets last month, signalling likely tighter regulations for the industry that takes
credit to the unbanked in India.
At the post-policy interaction with the media, the central bank leadership prodded NBFCs to raise more
equity and long-term debt instead of relying on short-term funds
that increasing asset liability mismatch in this manner can be particularly imprudent policy during tightening global and domestic liquidity
He said that the RBI, the government, and the capital markets regulator were monitoring the liquidity situation for NBFCs, of which there
Commercial paper issuances have come down as lower rated issuers moved from short term debt instruments to alternate fund-raising
options.
NBFCs use diverse sources of funds for expansion: They also tap the market and to keep the marginal cost lower, they borrow in the
form of commercial papers
Vishwanathan, deputy governor
NBFC sector plays an important role in meeting the credit needs of different segments of the economy, particularly the informal sector
