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Informist, Thursday, Feb. 13, 2025

--Sources: RBI governor meeting NBFC, microfin cos' heads Thursday 

--Sources: RBI governor to hold customary meet, discuss industry issues 

NEW DELHI – Reserve Bank of India Governor Sanjay Malhotra is currently holding his first formal meeting with chiefs of non-banking financial companies and microfinance institutions, people aware of the development said. "The new governor typically holds a formal meetings with executives, he has already met banks, today (Thursday) he is meeting NBFCs and MFIs," one of the persons mentioned above told Informist.

The meeting is being held at the central bank's headquarters in Mumbai, and the deputies to the RBI governor are also likely participating in the meeting. Malhotra, a career bureaucrat, was appointed as RBI governor on Dec. 9, succeeding Shaktikanta Das. He last served as the revenue secretary in the Ministry of Finance, prior to which he was the secretary in the Department of Financial Services.  

Another person cited above said that while the invitation for the meeting did not detail any particular agenda, it is only "natural" that industry-wide issues will be discussed. "Sectoral issues will of course be discussed," the person said. 

The meeting comes at a time when the central bank has been critical of the microfinance sector, especially regarding their unsecured loan books and usurious lending rates. RBI has been reviewing microfinance institutions' practices and in October, had taken action against two companies for imposing "excessive" interest rate spreads relative to their funding costs. On the other hand, the industry has been batting for more capital in order to scale up their operations.

Non-banking finance companies also had qualms against the RBI regarding the draft project financing norms which would impact several of them, including REC Ltd., India Infrastructure Finance Co. Ltd., and Indian Renewable Energy Development Agency. However, the recent assurance from Malhotra that it would not be possible to implement the draft norms before Mar. 31, 2026 have allayed their concerns, for now.  End

Reported by Priyasmita Dutta

Edited by Tanima Banerjee

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