Reserve Bank of India (RBI) has recently reinforced regulatory measures to ensure non-banking financial companies (NBFCs) adhere to a cash loan disbursement limit of Rs 20,000. This move is part of a broader strategy to foster a balanced and resilient financial ecosystem, targeting issues ranging from IT governance to credit expansion and non-performing assets (NPAs). By enforcing this cash limit, the RBI aims to curb potential risks associated with excessive cash transactions and ensure compliance with income tax regulations.
The behind story:
The recent regulatory measures implemented by the Reserve Bank of India targeting numerous banks, Non-Banking Financial Companies (NBFCs), and fintech firms underscore the significant emphasis regulators place on fostering a balanced and resilient ecosystem, whether in lending, IT governance, or credit expansion or addressing NPA’S and Provisioning.
While the regulatory actions this year have undoubtedly impacted business operations, they are deemed necessary to mitigate potential future challenges. The RBI collectively may be looking at the larger picture which is the cost worth paying to avert future problems. Does the memory of the decade-long NPA crisis serve as a poignant reminder?
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