NBFCs seek access to public deposits to diversify funding

NBFCs have become heavily dependent on bank funding, leading to funding concentration

- Neha Joshi

Non-banking financial companies (NBFCs), which have been grappling with limitations placed on their funding avenues, called on regulators for access to public deposits, a privilege currently reserved for banks.

The Reserve Bank of India (RBI) has been cautious about expanding this access to NBFCs, citing concerns over the risks posed by potential conflation between banks and NBFCs.

However, panelists at the Mint BFSI Summit argued that allowing NBFCs to tap into public deposits could significantly enhance their funding options, particularly as they face rising costs from international borrowings and reliance on banks.