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RBI, create more Bandhan-like banks if you want to obviate a mega NBFC crisis

India can convert some systemically important NBFCs into mid-sized banks. The RBI should adopt a gradualist approach and allow them to gain experience and knowledge as small finance banks before making them full-fledged banks. But it must act before it’s too late. Second of a three-part series.
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madhavankutty-g
1 Jul 2019 8 Mins Read 1 comments
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"...NBFCs should be enabled to operate as well-functioning entities with necessary capacity to reach wider sections of population." RBI governor Shaktikanta Das recently put up a brave front while analysing the plight of NBFCs at an event in Pune last month. To be fair, Das and his colleagues on Mint Street have been looking for ways to rescue
into forex reserves or using a portion of the National Infrastructure Investment Fund (NIIF) may be considered. The cost of prevention is always better than cure. So, the government will do well to loosen the purse strings for NBFCs now than paying a heavy price later if they slip into the darkness of failure. ( Graphics by Sadhana Saxena)
"...NBFCs should be enabled to operate as well-functioning entities with necessary capacity to reach wider sections of population." RBI governor Shaktikanta Das recently put up a brave front while analysing the plight of NBFCs at an event in Pune last month. To be fair, Das and his colleagues on Mint Street have been looking for ways to rescue into forex reserves or using a portion of the National Infrastructure Investment Fund (NIIF) may be considered. The cost of prevention is always better than cure. So, the government will do well to loosen the purse strings for NBFCs now than paying a heavy price later if they slip into the darkness of failure. ( Graphics by Sadhana Saxena)

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