RBI’s Warning to NBFCs
During an interaction on Wednesday, RBI Deputy Governor Swaminathan J urged Non-Banking Financial Companies (NBFCs) to bolster their governance and assurance functions, while also emphasizing the need to remain vigilant against potential risks and vulnerabilities.
The conference, which convened in Mumbai for the Heads of Assurance Functions of selected NBFCs, saw approximately 280 participants representing over 100 NBFCs, with Deputy Governors M Rajeshwar Rao and Swaminathan J addressing the audience.
In his remarks, Swaminathan highlighted the significant risks faced by NBFCs, including cybersecurity, operational risks, credit risks, and liquidity risks. He conveyed RBI’s supervisory expectations for regulated entities to ensure independent and meaningful assurance functions, along with fair and transparent conduct towards customers.
Deputy Governor M Rajeshwar Rao further elaborated on the role of assurance functions in addressing contextual issues such as third-party dependencies, operational risks, customer conduct, and operational transparency. He also discussed the transformative journey and contributions of the Non-Banking Financial Companies sector to the Indian financial landscape.
The conference also saw participation from Executive Directors and senior officials representing RBI’s Regulation and Supervision departments, along with technical sessions on Assurance Functions conducted by Chief General Managers of the RBI. Presentations on best practices and challenges faced by Heads of Assurance Functions from selected NBFCs were also delivered.
Titled ‘Resilient Financial System – Role of Effective Assurance Functions’, the event is part of RBI’s ongoing series of supervisory engagements with regulated entities over the past year.
