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NBFCs must focus on governance, liquidity management, asset quality, customer protection and digital transformation to achieve sustainable growth RBI deputy governor Murmu told these companies at a Confederation of Indian Industry (CII) organised summit. "Past liquidity events have shown how exposed NBFCs and HFCs can lead to shifts in market sentiment and funding concentrations. Strong liquidity risk management is not optional... Entities must diversify their funding sources. A deep, liquid corporate bond market will help, and we will keep working with market participants to build one," Murmu told top NBFC executives. The regulator's focus remains on proportional regulation and financial stability to support the sector's growth Murmu said who as deputy governor is in charge of departments of regulation and enforcement among others said in a speech. He said that as credit growth picks up, so does the risk to asset quality, warning lenders that growth must not come at the cost of underwriting. "Lenders need rigorous stress testing, early warning systems, and dynamic provisioning. AI and machine learning tools should be used more to detect early signs of borrower stress. Let me be clear, growth must never come at the cost of underwriting standards," he said. Murmu said boards and senior management must build a culture of sustained compliance and ethics across the organization which strengthens as the sector scales up. He said entities must invest in strong cyber security to protect customers, data, and maintain trust. "Innovation must serve both efficiency and fairness. It should not exclude vulnerable segments or add new risks. Above all, innovation must be responsible," he said. "The opportunities ahead of NBFC and HFCs are real and large. India's growing economy, demographic dividend, rapid urbanization, and digital growth, all offer room to grow. This growth will be shaped by technology and by trust," he said. He said NBFC credit today is about about 27% of the credit extended by scheduled commercial banks, up from 26% a year ago and the role of NBFCs is changing again, from alternative lenders to specialized financial partners. "The non-banking sector has faced real challenges in the recent past. However, liquidity shocks expose weak acceptability management, heavy reliance on short-term wholesale funding and deep links with wider financial systems. These episodes also show the need for stronger governance," he said. He listed customer trust as fundamental to sustainable business. "But digitalization brings cyber resilience. Cyber resilience must stay a top priority. Entities must invest in strong cyber security to protect customers, data, and maintain trust;" he said. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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