Reserve Bank of India Governor Sanjay Malhotra urged non-banking financial companies (NBFCs) and housing finance companies (HFCs) to strengthen underwriting standards and uphold customer-centric practices during a high-level meeting in Mumbai. The Governor emphasized that these measures are essential to ensure sustainable growth and maintain confidence in the sector.

Meeting Details and Participation

The meeting brought together managing directors and chief executive officers from select NBFCs, government NBFCs, housing finance companies, and microfinance institutions. This gathering marked the first such interaction with NBFCs since February, highlighting the importance of regular stakeholder engagement.

Key Areas of Focus

During the interactive session, Governor Malhotra highlighted several crucial aspects for the sector's sustainable development:

Industry Representation and Engagement

The meeting achieved significant industry representation, with participants accounting for approximately 53% of NBFC sector assets. Key attendees included representatives from self-regulatory organizations such as Sa-Dhan, the Micro Finance Institutions Network, and the Finance Industry Development Council.

Senior RBI officials led by Deputy Governors T. Rabi Sankar, Swaminathan J, Poonam Gupta, and SC Murmu participated alongside the MD & CEO of the National Housing Bank, ensuring comprehensive regulatory oversight and guidance.

Strategic Implications

The Governor's emphasis on strengthening underwriting standards reflects the central bank's commitment to maintaining financial stability while supporting economic growth through adequate credit flow. The focus on customer-centric practices aligns with broader regulatory objectives of ensuring that NBFCs and HFCs continue their vital role in credit intermediation while maintaining high standards of governance and risk management.

This engagement underscores the RBI's proactive approach to sector supervision and its commitment to fostering sustainable growth in the non-banking financial sector through regular dialogue with key stakeholders.

The Reserve Bank of India has announced a significant administrative change that will see it taking over the banking operations of the Delhi government. Starting January 9, 2026, the central bank will assume responsibility for general banking operations and public debt management of the Government of National Capital Territory of Delhi.

Agreement Details

The RBI formalized this arrangement through an official agreement signed under sub-section (1) of Section 21A of the Reserve Bank of India Act, 1934. This legislative provision enables the central bank to enter into such agreements with state governments for banking services.

Scope of Operations

Under the new agreement, the RBI will handle two primary functions for the Delhi government. The central bank will carry out all general banking business operations, which typically include account management, transaction processing, and routine banking services. Additionally, the RBI will manage the rupee public debt of the Delhi government, encompassing debt issuance, servicing, and related financial operations.

Implementation Timeline

The transition will become effective from January 9, 2026, providing approximately two years for preparation and coordination between the RBI and the Delhi government. This timeline allows for proper planning and system integration to ensure seamless banking operations.

The announcement represents a formal consolidation of state government banking operations under the RBI's direct management, following established procedures under the Reserve Bank of India Act.