RBI asks NBFCs to become part of Unified Lending Interface for better financial inclusion

Reserve Bank of India Governor Sanjay Malhotra on Thursday asked Non-Banking Financial Companies (NBFCs) to become part of the Unified Lending Interface (ULI) being put in place by the central bank. "Urging the NBFCs to further their contribution towards financial inclusion, the Governor requested them to become part of Unified Lending Interface (ULI) being put in place by the Reserve Bank," the RBI Governor said. 

RBI Governor held a meeting with the Managing Director and Chief Executive Officers of select Non-Banking Financial Companies (NBFCs) across all layers, including Government NBFCs, Housing Finance Companies and Micro-Finance Institutions.

According to RBI, these NBFCs constitute nearly 50 per cent of the total assets of the NBFC sector. 

Apart from the NBFCs, the representatives from Self-Regulatory Organizations (SROs), Sa-Dhan and Micro Finance Institutions Network (MFIN), as well as from the Finance Industry Development Council (FIDC) also participated in the meeting.

The meeting was part of the Reserve Bank's series of engagements with the Boards and Senior Management of its Regulated Entities. 

The previous meeting with select NBFCs was held on August 25, 2023.

The meeting was also attended by Deputy Governors M Rajeshwar Rao, T Rabi Sankar and Swaminathan J, along with Executive Directors-in-Charge of Regulation, Supervision and Financial Inclusion.

In his opening remarks RBI Governor underscored the significant role played by NBFCs in credit intermediation, particularly in making credit available for small businesses and niche segments. 

Highlighting the collaborative efforts required between the Reserve Bank and the NBFCs, the Governor stressed balancing growth aspirations with sound practices for ensuring inclusive development, customer protection and financial stability.

He also underscored the significance of ensuring fair treatment to customers and putting in place a prompt grievance redress mechanism.