NEWS
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- The Reserve Bank of India(RBI) Governor has said that the RBI is giving a fresh look at the regulatory and supervisory framework of the Non-banking Financial Companies(NBFCs).
- The RBI Governor said that the Reserve Bank will continue to monitor the activity and performance of NBFC sector with a focus on major entities and their inter-linkages with other sectors.
- The RBI has recently released the draft guidelines for a robust liquidity framework for the NBFCs.
- This framework was issued as NBFCs have come under severe liquidity pressure ever since the IL&FS crisis erupted compelling them to stop deposit renewals and resort to high cost borrowings.There are concerns that NBFCs may run out of money which will lead to defaults.
- Further,the RBI has also asked NBFCs with asset size of more than Rs 5,000 crore to appoint a Chief Risk Officer(CRO) with clearly specified roles and responsibilities amid growing worries over a crisis in the NBFC sector.
- The RBI has also created a specialised supervisory and regulatory cadre within the RBI in order to strengthen the supervision and regulation of commercial banks, urban cooperative banks and non-banking financial companies.




