Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday asked non-banking financial companies (NBFCs) to strengthen their governance standards, compliance and risk management.
In the meeting held with managing directors and chief executive officers of select large NBFCs, including government NBFCs and housing finance companies (HFCs) in Mumbai, he asked them to improve their internal audits. These entities constitute nearly 50 per cent of the total assets of all NBFCs including HFCs.
Das advised NBFCs and HFCs to remain alert to avoid any complacency during good times.
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There were discussions on diversifying the resources for NBFCs and HFCs to contain the increasing reliance on bank borrowings, risks associated with high credit growth in retail segment mostly in unsecured and prioritising the upgradation of IT systems and cyber security, according to a release issued by the RBI.
Strengthening of balance sheets with improved provisioning cover, monitoring of stressed exposures and slippages and ensuring robust liquidity and asset-liability were also part of the agenda.
RBI Deputy Governors M Rajeshwar Rao and Swaminathan J and the National Housing Bank (NHB) Managing Director S K Hota also attended the meeting.