Reserve Bank of India Deputy Governor Shirish Chandra Murmu on Thursday told non-banking finance companies and housing finance companies to diversify their funding sources.
“Past liquidity events have shown how exposed NBFCs and HFCs can be to shifts in market sentiment and funding concentration. Strong liquidity risk management is not optional. Recent episodes in some advanced economies are reminder of this. Entities must diversify their funding sources,” Murmu said at the CII NBFCs & HFCs National Summit 2026.
He emphasised the need for tighter governance standards. Liquidity shocks exposed weak asset-liability management, heavy reliance on short-term wholesale funding, and deep links with the wider financial system, he said.
Murmu added that a deep, liquid corporate bond market will help. “…we will keep working with market participants to build one. Securitisation should also grow beyond a liquidity tool into a genuine way to transfer risk and free up capital, with proper skin-in-the-game and transparency rules.”
The role of NBFCs is changing from alternative lenders to specialised financial partners and recent numbers demonstrate the same, said Murmu. The deputy governor highlighted that NBFC credit is about 16.7% of nominal GDP, up from 15.9% a year earlier. It is 27% of the credit extended by scheduled commercial banks, up from 26%.
“Many NBFCs and HFCs have deep expertise in specific sectors, such as supply chain finance, infrastructure debt, affordable housing, vehicle financing, and gold and silver-backed lending, among others. This specialisation supports sharp risk management and better products. Our economy needs lenders who understand specific industries and can structure credit around their borrowers’ cash flows,” said Murmu.