NBFCs play a crucial role in India’s credit ecosystem, but non-compliance and operational missteps can lead to RBI penalties, financial losses, or even shutdowns!
Recently, RBI imposed penalties totaling ₹76.60 lakh on four NBFC-P2P lenders – Faircent, LEO1, Finzy, and Rang De.
If established players are facing fines, smaller NBFCs must stay extra cautious!
Common Mistakes NBFCs Make & How to Avoid Them
1. Ignoring RBI Compliance → License cancellations & hefty fines!
✅ Solution: Regular audits, updated policies & compliance automation.
2. Poor Risk Management → High defaults & financial instability
✅ Solution: Strong credit checks & diversified loan portfolios.
3. Mismatched Funds (ALM Issue) → Liquidity crises
✅ Solution: Match long-term loans with stable funding sources.
4. Uncontrolled Growth → Expanding too fast = financial disaster!
✅ Solution: Scale sustainably & avoid excessive borrowing.
5. Weak Loan Collection → Rising NPAs & lost revenue
✅ Solution: AI-powered tracking & proactive debt recovery strategies.
6. Hidden Charges & Poor Customer Experience → Lost trust
✅ Solution: Transparent pricing & customer-centric policies.
7. Weak Leadership & Governance → Poor decision-making harms stability
✅ Solution: Strong internal controls & independent oversight.
8. Ignoring Cybersecurity Risks → Data breaches damage trust
✅ Solution: Secure IT infrastructure & data protection policies.
NBFCs That Avoid These Mistakes → Grow Faster & Stronger!
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