RBI asks banks, NBFCs to allow customers to choose multiple networks
It said that it found in a review that some arrangements between card networks and issuers are “not conducive to the availability of choice for customers”.
Reserve Bank of India Governor Shaktikanta Das held a meeting on Friday with the MDs and CEOs of select Non-Banking Financial Companies (NBFCs) including Government NBFCs and Housing Finance Companies (HFCs) in Mumbai.
At the meeting, discussions were also held on diversifying the resources for NBFCs and HFCs to contain the increasing reliance on bank borrowings, risks associated with high credit growth in the retail segment mostly in unsecured.
The stakeholders also discussed prioritizing the upgradation of IT systems and cyber security amid the increase in the use of technology applications.
Strengthening balance sheets with improved provisioning cover, monitoring of stressed exposures and slippages, ensuring robust liquidity and asset-liability management, ensuring reasonableness and transparency in the pricing of credit, and adherence to the Fair Practices Code including robust grievance redress mechanism were the other key points that were deliberated in the meeting.
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The Governor in his opening remarks complimented the NBFCs and HFCs for their improved financial health and operational resilience in recent years.
While acknowledging the important role played by the sector in delivering credit to the unbanked and underserved areas, the Governor advised that the NBFCs and HFCs need to remain alert to avoid any complacency during good times.
He further highlighted the need for further strengthening the governance standards and assurance mechanisms viz. Compliance, Risk management and Internal audit in these entities.
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