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Über dieses Buch

This book examines the trend and growth of non-banking financial companies (NBFCs), both from balance sheet and regulations view-points. It further investigates the role of NBFCs in furthering financial inclusion, last-mile delivery of credit and their contribution to financial sector.

Since the Reserve Bank of India (RBI) formally recognised the NBFCs in India in 1964, they have increased significantly in terms of size, form and types of products and instruments. They have also managed their asset quality better than banks. Traditionally they were dependent on banks for funds, but after the global financial crisis they began to tap the capital market. Concomitantly, the RBI regulations have closed the fault lines and tightened rules.

The book assesses whether NBFCs in India should be treated as shadow banks, discusses how to achieve the right amount of regulation and safeguards without unduly stifling the NBFC sector, and studies the funding opportunities and challenges of NBFCs in India. As such, it serves as a basic reference for students in finance, and a valuable tool for professionals such as policymakers and investment analysts and other stakeholders in the finance area.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Status and Role of NBFCs

Abstract
Traditionally, India has a bank-dominated financial sector. However, the non-bank financial institutions or intermediaries (NBFIs) have also coexisted. The NBFIs consist of varieties of financial institutions that cater to a wide range of financial requirements.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 2. Growth and Development of NBFCs

Abstract
In 1999, 7855 NBFCs registered with the RBI. However, in 2002, the number of NBFCs registered with RBI increased to 14,077. During this period, however, the number of deposit taking NBFCs increased from 624 to 784 (not shown).
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 3. Regulatory Developments and Prudential Norms

Abstract
Non-bank financing companies form an integral part of the Indian financial system. In addition to banks, NBFCs also provide funding for various important economic activities, thereby contributing to the growth of the Indian economy. By this process, the NBFCs provide a healthy competition to the banks in terms of various service parameters.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 4. Acceptability of NBFCs to the Public

Abstract
Although the origin of NBFCs could be traced back to early 1950s, they started their journey in the 1960s by covering both savers and investors who were not adequately covered by the formal banking sector, especially in the rural and semi-urban sectors.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 5. Demand for NBFCs’ Credit

Abstract
The NBFCs in India comprise a host of institutions. They mostly engage in investment, insurance, chit fund, nidhis, merchant banking and alternative investments as their principal business.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 6. Risk Management in NBFCs

Abstract
Risk management has become the ‘mantra’ for all segments of financial sector. The RBI has already positioned the risk management process for banks and the same has been introduced for NBFCs-D.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 7. Financial Inclusion and NBFCs

Abstract
While it is globally accepted that the development of financial services is essential for growth of any economy, it is only recently that many nations including India have realized that benefits of growth might not trickle down to the lower strata of the society unless it is inclusive.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 8. Banks and NBFCs in India: A Comparative Analysis

Abstract
It is a well-established fact that banks occupy an important role in the economic development of India, through loans and investments for agriculture, industries and services sectors. India’s growth is predominantly bank-financed.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 9. Non-banking Financial Intermediaries: International Experiences

Abstract
The non-bank financial institutions or non-bank businesses or shadow banks (SBs) are internationally recognized as financial intermediaries/activities involved in “credit intermediation outside the conventional banking system and constitute about one-fourth of total financial intermediaries worldwide” (IMF 2014).
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Chapter 10. Conclusions and Recommendations

Abstract
The most significant insights and recommendations of the study are set out in this chapter.
R. Kannan, K. R. Shanmugam, Saumitra Bhaduri

Backmatter

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