MUMBAI: Reserve Bank of India (RBI) governor Shaktikanta Das mentioned the central bank would closely monitor the well being of non-banking financial firms (NBFCs) and it could no longer hesitate to take corrective measures, if needed, to handle problems within the shadow banking sector.
“We won't hesitate to take any required steps to care for financial stability within the short-, medium- and long-term,” Das mentioned in a speech on Saturday at a convocation ceremony within the western Indian town of Pune.
The comment comes at a time when there are fears that India could also be dealing with a major disaster in its shadow banking sector after stocks of mortgage lender Dewan Housing Finance Corp Ltd (DHFL) plunged this week after two credit-rating companies lower their view of DHFL debt to “default” ranges.
The looming hassle at DHFL comes 9 months after a sequence of downgrades and defaults at any other major NBFC, Infrastructure Leasing and Financial Services (IL&FS), shook stock markets and stoked issues of a malaise within the sector.
“The Reserve Bank will proceed to watch the task and performance of this sector with a focal point on major entities and their inter-linkages with different sectors,” he mentioned, in a speech that was published on the RBI’s site late on Saturday.
The regulator will soon factor final pointers for liquidity possibility control and will installed position a comprehensive information generation framework to give a boost to surveillance of NBFCs, the governor mentioned.
Given the significance of NBFCs for the Indian economy, the governor stressed the desire for the next stage of supervision of such firms to ensure forged credit growth and asset liability control.
Das mentioned as part of projects to reinforce supervision of NBFCs, the central bank is putting in place a machine to ensure common interplay with all stakeholders within the shadow banking value chain similar to auditors, credit-rating companies and banks.
The central bank on Friday issued new pointers around the answer of stressed belongings after the Supreme Court in April struck down its earlier pointers pronouncing it had acted past its powers.
The new regulations “will maintain the improvements in credit tradition” and assist in making financial machine sturdy and resilient, Das mentioned on Saturday.
Das additionally urged Indian public sector banks (PSBs) to not rely solely on govt capital infusions to solidify their stability sheets.
“Depending upon particular person eventualities, PSBs must get admission to the capital market for mobilisation of capital,” he mentioned.
“We won't hesitate to take any required steps to care for financial stability within the short-, medium- and long-term,” Das mentioned in a speech on Saturday at a convocation ceremony within the western Indian town of Pune.
The comment comes at a time when there are fears that India could also be dealing with a major disaster in its shadow banking sector after stocks of mortgage lender Dewan Housing Finance Corp Ltd (DHFL) plunged this week after two credit-rating companies lower their view of DHFL debt to “default” ranges.
The looming hassle at DHFL comes 9 months after a sequence of downgrades and defaults at any other major NBFC, Infrastructure Leasing and Financial Services (IL&FS), shook stock markets and stoked issues of a malaise within the sector.
“The Reserve Bank will proceed to watch the task and performance of this sector with a focal point on major entities and their inter-linkages with different sectors,” he mentioned, in a speech that was published on the RBI’s site late on Saturday.
The regulator will soon factor final pointers for liquidity possibility control and will installed position a comprehensive information generation framework to give a boost to surveillance of NBFCs, the governor mentioned.
Given the significance of NBFCs for the Indian economy, the governor stressed the desire for the next stage of supervision of such firms to ensure forged credit growth and asset liability control.
Das mentioned as part of projects to reinforce supervision of NBFCs, the central bank is putting in place a machine to ensure common interplay with all stakeholders within the shadow banking value chain similar to auditors, credit-rating companies and banks.
The central bank on Friday issued new pointers around the answer of stressed belongings after the Supreme Court in April struck down its earlier pointers pronouncing it had acted past its powers.
The new regulations “will maintain the improvements in credit tradition” and assist in making financial machine sturdy and resilient, Das mentioned on Saturday.
Das additionally urged Indian public sector banks (PSBs) to not rely solely on govt capital infusions to solidify their stability sheets.
“Depending upon particular person eventualities, PSBs must get admission to the capital market for mobilisation of capital,” he mentioned.
RBI to enhance monitoring of shadow banking firms
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Reviewed by Kailash
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June 11, 2019
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