RBI governor Shaktikant Das has ruled out ordering an asset quality review of the large NBFCs but he reiterated the regulatory resolve to not let any large NBFC fail.
He was addressing the press on the sidelines of the national banking conference being organised by the industry lobby Ficci in Mumbai today.
He said at the moment there is no such proposal to have an asset quality review on NBFC but also added that 500odd NBFCs and HFCs are closely being monitored by the apex bank and the monitoring and supervision include all aspects of their functioning, including their capital adequacy, stability, their cash inflow, outflow.
The over 12,000-odd non-banking financial institutions, coupled with their housing finance peers, collectively control a quarter of the credit market, have been under severe stress following the bankruptcy of one of the largest players IL&FS group last September.
The IL&FS group owes close to Rs 1 trillion to the system and more than half of that is to banks, mostly state-owned ones. Its failure has made banks highly risk-averse to the NBFC sector, leading to a severe liquidity crunch.
The group is not only under the bankruptcy process now but also under many a probe including by the ED, CBI and the SFIO. (AIR NEWS)