IANS | 23 Nov, 2023
Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday
expressed grave concern over the high “concentration” of credit that
NBFCs were availing from banks to finance their lending operations and
said this has emerged as “a risk” in the system.
Addressing the
FIBAC 2023 conference here, Das said that there was a need for NBFCs to
raise funds from other sources and reduce their dependence on banks to
scale down the risk due to the high “interconnectedness”.
He
also said that many lenders were depending too much on the algorithms to
make their decisions and there was a need to analyse data more
carefully before making investment decisions.
The RBI Governor
also underlined the fact that very high rates of interest were being
charged by lenders in the case of microfinance and there was a need to
usher in more transparency and need to avoid “usurious” rates of
interest in order to promote economic growth.
At the same time,
Das said all business and financial entities need to capitalise on new
opportunities and make investments to expand capacities, skill human
resources and adopt new technologies to ensure growth.
“The prospects are at a new high in the country and this is the time to make it India’s moment,” he added.
