1. NBFCs play a critical role in furthering the goal of financial inclusion. It is our view that in order to make access to financial services universal, while ensuring systemic stability, we need to build on the separate natural strengths of banks and NBFCs. While banks need to grow into directly regulated, very transparent, very large institutions, NBFCs must be institutions with deep local understanding that leverage technology and local talent to provide a comprehensive range of financial services and are held accountable for the financial well-being of clients. Financial inclusion requires the proliferation of such NBFCs funded directly by banks and capital markets, which also supervise the NBFCs as counterparties, so that regulatory capacity does not constrain their proliferation.
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