RBI Dy Gov Murmu Asks NBFCs To Diversify Funding, Invest In Cyber-security
Murmu said that past liquidity events have shown how exposed NBFCs and HFCs can be to shifts in market sentiment and funding concentration. He asked entities to diversify their funding sources. “A deep, liquid corporate bond market will help, and we will keep working with market participants to build one. Securitisation should also grow beyond a liquidity tool — into a genuine way to transfer risk and free up capital, with proper skin-in-the-game and transparency rules.”
Mumbai: Reserve Bank of India (RBI) Deputy Governor Shirish Chandra Murmu on Thursday asked non-banking financial companies (NBFCs) and housing finance companies (HFCs) to diversify their funding sources, strengthen underwriting standards, and invest in strong cyber-security to protect customer data and maintain trust.
In his keynote address at the 7th NBFC and HFC Summit here, Murmu said that NBFC and HFCs will face new challenges alongside new opportunities. He listed five areas critical for sustainable growth: governance and culture; liquidity management; asset quality and credit risk; customer protection and fair conduct; and digital transformation and cyber resilience.
Murmu said that past liquidity events have shown how exposed NBFCs and HFCs can be to shifts in market sentiment and funding concentration. He asked entities to diversify their funding sources. “A deep, liquid corporate bond market will help, and we will keep working with market participants to build one. Securitisation should also grow beyond a liquidity tool — into a genuine way to transfer risk and free up capital, with proper skin-in-the-game and transparency rules.”
On governance, he said boards and senior management must build a culture of compliance and ethics across their organisations. “As the sector scales, its strength must scale with it,” he said.
As credit growth speeds up, so does the risk to asset quality. He said lenders need to use rigorous stress testing, early-warning systems, and dynamic provisioning. AI and machine learning tools to detect early signs of borrower stress. “Let me be clear: growth must never come at the cost of underwriting standards.”
He said while technology adoption must keep deepening — from blockchain in supply chain finance to AI in fraud detection, cyber resilience must stay a top priority. He urged entities to invest in strong cyber-security to protect customer data and maintain trust.