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Finance Minister asks NBFCs not to aggressively market or push loans to customers
Jul-10-2025

Finance Minister Nirmala Sitharaman has asked non-banking financial companies (NBFCs) not to aggressively market or push loans to customers. She said financial inclusion cannot be used as a pretext for ‘financial exploitation’ and added that the lending should be based on the genuine needs and repayment capacity of customers. She also asked NBFCs to adhere to the Reserve Bank of India's loan recovery norms strictly, and keep interest rates at reasonable levels. 

Sitharaman said there should be deep collaboration between NBFCs and banks, especially through co-lending arrangements for providing loans to the priority sector. She said loans should not be aggressively marketed or pushed onto individuals, and stressed that the recovery process should be fair, empathetic and in a respectful manner, in strict accordance with the RBI's Fair Practices Code. She said as the NBFC model matures, the focus on risk management should increase.

The minister further emphasised that liquidity and credit risks must be rigorously assessed and managed, while robust internal controls should ensure oversight on asset-liability mismatches, nature and tenor of the funding sources, and concentration risks. A sustainable business model must be the cornerstone of the sector's growth, and at the heart of a sustainable credit landscape lies a financially aware and literate customer. Loan book of NBFCs has doubled to Rs 48 lakh crore in March 2025 in the past four years from Rs 24 lakh crore. They currently account for about 24 per cent of the volume of credit disbursed by commercial banks and the aim should be to reach 50 per cent. NBFCs are no longer 'shadow banks' -- their stronger regulation and oversight is the best testimony of their importance in the financial system and the broader economy. 


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