RBI Goes After Non-Compliance In Financial Sector

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The Reserve Bank of India (RBI) has been vigilant in its actions against non-banking financial companies (NBFCs), fintechs, and credit card issuers in the recent past. These actions have primarily targeted lapses in corporate governance, overstepping of operational boundaries, and deviations from credit underwriting standards. Recently, the RBI took decisive steps against IIFL Finance’s gold loans and JM Financial Products’ financing of bonds and stocks. Specifically.The underlying reason for the RBI’s stringent actions lies in its proactive approach to prevent a potential asset quality shock in the banking system. This caution is particularly relevant for segments involving unsecured loans, which lack collateral in case of a financial collapse. The regulator aims to maintain high compliance standards and ensure stability within the financial sector. The recent actions against entities like Paytm Payments Bank, IIFL, and JM Financial demonstrate the RBI’s commitment to effective supervision and its willingness to address concerns promptly.RBI is firmly committed to maintaining financial stability and is unafraid to address supervisory issues head-on. Watch Siddharth Zarabi, Managing Editor of Business Today TV, in conversation with Sanjay Agarwal, Senior Director at Careedge Ratings, Abizer Diwanji, Head of Financial Services at EY, and Hemindra Hazari, Banking Expert.

SOURCEBusiness Today
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