NBFCs Urged to Rethink Resource Strategy and Compliance Frameworks
I was very happy to make a
presentation on the above topic ,At the 5th NBFC Tomorrow Conclave & DNA
Awards held in Mumbai, on21st August 2025. I underscored the urgent need for NBFCs to
diversify funding sources and embrace technology-driven compliance solutions to
remain resilient in a rapidly shifting regulatory and financial environment.
The Funding Conundrum
NBFCs continue to face structural
limitations in accessing low-cost public deposits, leaving them heavily reliant
on bank loans, commercial papers, and non-convertible debentures. This
dependence, coupled with asset-liability mismatches and limited access to RBI
refinancing, has exposed the sector to liquidity risks and market volatility.
I emphasized the importance of strategic
diversification. Advocated for co-lending partnerships with banks,
securitization of loan portfolios, and tapping into alternative funding
channels such as Alternative Investment Funds (AIFs), Foreign Portfolio
Investors (FPIs), and global institutions like IFC, ADB, and JICA. I called for
a dedicated refinancing window from the RBI to support long-term funding needs.
Compliance in the Age of
Complexity
The compliance landscape for
NBFCs has grown increasingly intricate, especially under the Scale-Based
Regulation (SBR) framework introduced by the RBI. Smaller NBFCs, in particular,
struggle to keep pace with evolving norms around KYC, AML, cybersecurity, and
fair practices.
I urged NBFCs to invest in
RegTech solutions to automate monitoring and reporting, adopt digital KYC and
AI-driven AML tools, and strengthen cybersecurity infrastructure. I cited Jio’s
successful deployment of large-scale e-KYC as a model worth emulating.
Additionally, I stressed the importance of transparent disclosures, robust
grievance redressal mechanisms, and proactive regulatory engagement.
A Call for Transformation
The presentation concluded with a
strategic outlook for the sector. To thrive in the future, NBFCs must
prioritize governance, build investor confidence, and adopt customer-centric
practices. Technology will be a key enabler—not just for compliance, but for
operational efficiency and risk management. The future of NBFCs lies in
innovation, resilience, and trust. As the sector continues to evolve, those who
adapt swiftly and strategically will be best positioned to lead.
