NBFCs need to diversify risks across sectors and geographies as well as maintain capital adequacy norms and offer core banking solutions, ex-chairman Rajnish Kumar Told. Kumar also said that the risk appetite of NBFCs is higher than that of banks, and that the regulatory stance will become tougher, the existence of regulatory arbitrage between lenders and non-banking entities.

“related asset quality review (AQR) of lenders, as mentioned earlier reserve Bank of India Governor Raghuram RajanThe NPA The problem started with NBFCs, the whole matter is related to risk management and Government,

“NBFCs need to take a diversified approach across sectors and geographies and also be aware of the risk metrics,” he said during an event organized by micro-finance institution VFS Capital here on Friday evening.

Kumar said NBFCs will have to maintain capital adequacy norms, offer core banking solutions and make adequate disclosures by 2025.

He said that in the financial sector about 23 per cent of the loans are through NBFCs.

With regard to NPAs in the banking sector, ex

The chief said lenders cannot escape their share of blame, adding that “faulty” government policies in the “power, coal, telecom and road sectors” are also responsible for bad loans.

,NPS The crisis is a cycle, and it keeps on evolving,” he said.