While making the Monetary Policy Committee (MPC) announcements, RBI Governor Shaktikanta Das pointed out that while the overall NBFC sector remains healthy, there are a few outliers adopting a “growth-at-any-cost” approach. These NBFCs, including Microfinance Institutions (MFIs) and Housing Finance Companies (HFCs), are focused on excessive returns on equity, often pushing business targets aggressively. Das said that such behaviour could lead to high interest rates and excessive indebtedness for borrowers, which, if left unchecked, could pose risks to financial stability.
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