Growth and performance of non-banking financial institute in India

In the multi-tier financial system of India, NBFCs have turned out to be engines of growth and are integral part of the Indian financial system, enhancing competition and diversification in the financial sector, spreading risks specifically at times of financial distress and have been increasingly recognized as complementary of banking system at competitive prices. These institutions have been pioneering at retail asset backed lending, lending against securities, microfinance etc and have been extending credit to retail customers in under-served areas and to un-banked customers. In the annual policy of 2010–2011, the RBI has announced two new categories of NBFCs. The aim of this paper is to enrich the growth and regulation of NBFCs in India. It also highlights the components of assets and liabilities of these institutions. This is also an attempt to judge the financial and operational performance of these institutions. This paper will be useful for financial institutions, portfolio managers, wealth managers and other investors as well as regulators who wish to have better understanding of NBFCs.