RBI top brass to meet NBFC chiefs

The Reserve Bank of India (RBI) will convene a meeting with top executives of select non-banking finance companies (NBFCs), responding to concerns over their accelerated credit expansion and increased dependency on external financing.

This engagement forms part of the central bank’s broader initiative to maintain regular dialogue with boards and senior leadership across regulated financial institutions.

Recent data from the Financial Stability Report (FSR) reveals NBFCs’ gross advances surged by 21.1% year-on-year as of September 2025, outpacing scheduled commercial banks’ 11% credit growth. The FSR serves as a biannual assessment collaboratively prepared by India’s financial regulators.

Within consumer credit portfolios, NBFCs recorded 21.3% annual growth versus 16.8% for commercial banks during the same period.

The FSR highlighted potential vulnerabilities stemming from NBFCs’ heavy reliance on external funding, warning that currency fluctuations could undermine cost advantages during economic stress. Currently, approximately 86% of foreign currency borrowings remain hedged.

Key concern

Global financial authorities have identified the expansion of non-bank financial intermediaries – including NBFCs, mutual funds, and insurance providers – and their deepening connections with traditional banking systems as significant systemic considerations. Indian banks have notably increased their exposure to these entities through various financial channels.

During recent consultations with public and private banking leaders, RBI Governor Sanjay Malhotra emphasized maintaining vigilance amid economic uncertainties while acknowledging steady improvements in banking sector stability throughout 2025.

Published on January 4, 2026