Every fresh RBI directive can mainly affect large gold financing companies that have their micro-financing arms that pay loans by taking the precious metal as collateral, sources say
The Reserve Bank of India (RBI) is considering getting shadow loans to reduce business activities of subsidiaries that clash with those of the parent, in accordance with rules that have already been proposed for banks, said people with knowledge of the case.
The Central Bank discussed this proposal with a few non-banking financing companies, said the people and asked not to be identified about discussing private conversations, because the regulator strives to reduce risks in a sector that blew up a few years ago. More guidance from the regulator, especially with every overlaps in the credit company between subsidiaries and their parent company, is expected to be spent soon, they said.
RBI has been vigilant for potential flowups in the sector and has warned Shadow Lenders that it would not hesitate to take action against companies that strive for reckless growth. In this case, the RBI is concerned that double companies that can provide more customers can lead to complex credit structures that increase the risks, the people said.
Every fresh RBI guideline can mainly touch large gold financing companies with their micro-financing arms that expand loans by taking the precious metal as collateral, the people said.
The RBI did not respond to an e -mail to ask for comments.
The proposed rules are also aimed at harmonizing regulations between banks and shadow loans as the latter become more important. Their rapid growth in recent years has stimulated the credit flows and helped financial inclusion, although the aggressive expansion has also taken action from the regulator.
RBI deputy governor Swaminathan Janakiraman said during a conference in March that the intention of the regulator to shadow loans is not to suppress innovation. Instead, it is to guarantee sustainable growth and well -managed risks, he said.
Various banks such as HDFC Bank LTD and Axis Bank had had to explore LTD for partners to buy their subsidiaries from the consumer loans after the RBI had tightened the investigation. In October last year, the regulator suggested that there should be no overlap in the credit activities by the bank and its entities.
More stories like these are available on Bloomberg.com
Published on August 28, 2025
#RBI #Mulls #stop #shadow #banks #duplicating #property