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RBI Plans Tight Oversight on NBFC Liquidity Buffers and Risk Exposure
RBI will revise NBFC liquidity norms to curb lending risk and improve resilience through real-time stress testing and higher provisioning mandates.
The Reserve Bank of India is set to strengthen liquidity and exposure norms for non-banking finance companies in response to volatile credit conditions. Officials said the updated framework will emphasize real-time stress testing, risk-weight adjustments, and higher provisioning for unsecured retail portfolios. The move aims to reduce contagion risk from aggressive lending in high-yield segments. Market experts believe these reforms could improve financial stability without constraining credit flow. A draft circular is expected mid-November following consultations with leading NBFCs and industry associations.