RBI Governor urges NBFCs to maintain sound underwriting standards

Reserve Bank Governor Sanjay Malhotra on Monday underlined the need for sound underwriting standards and close monitoring of asset quality at a meeting with senior officials of select non-banking financial Companies (NBFCs) here.

As part of the Reserve Bank’s ongoing engage-ment with regulated entities, the Governor held a meeting with the managing directors and chief executive officers (MDs and CEOs) of select NBFCs, including Government NBFCs, housing finance companies (HFCs) and microfinance institutions.

In his opening remarks, the Governor highlighted the important role of NBFCs and HFCs in facilitating credit flow. He underlined the need for sound underwriting standards and close monitoring of asset quality, the Reserve Bank of India (RBI) said in a release.

Malhotra further emphasised the criticality of customer centricity, ethical conduct, and responsible lending, along with prompt grievance redressal, to preserve confidence in the sector and support its orderly and sustainable development. The Reserve Bank had last held a similar meeting with NBFCs on February 13, 2025.

The participating entities together account for about 53 per cent of NBFC sector assets. Industry participation included the representatives of self-regulatory organisations, Sa-Dhan, the Micro Finance Institutions Network and the Finance Industry Development Council.

During the discussion, participants shared feedback on policy issues and operational matters relating to the NBFC sector, the RBI said. The meeting was also attended by deputy governors T Rabi Sankar, Swaminathan J, Poonam Gupta, and S C Murmu, and the MD and CEO of the National Housing Bank, as well as other senior officers of the Reserve Bank.