Union Finance Minister Nirmala Sitharaman issued a strong message to non-banking financial companies (NBFCs), urging them to adopt fair lending practices and humane recovery methods. Addressing industry stakeholders at the NBFC Conclave 2025, she voiced concerns over the rising volume of consumer complaints and called for greater transparency and responsibility in operations.

“NBFCs must ensure that recovery processes remain within the bounds of regulation and humanity,” the Finance Minister emphasised, adding that interest rates should remain reasonable and all charges must be clearly communicated to borrowers.

Highlighting the pivotal role NBFCs play in India’s economic development, Sitharaman stated that these institutions are indispensable in providing credit to a broad spectrum of society—from farmers and small businesses to middle-income households. “Whether it’s a farmer, a micro-entrepreneur, or a middle-class family, NBFCs serve as essential credit providers,” she said.

Amid global economic uncertainties, the Finance Minister stressed the need for robust risk management and liquidity oversight within the NBFC sector. She urged companies to base lending decisions on actual borrower needs and repayment capacities.

Roadmap for 2047: Ambitious Targets for NBFC Sector

Sitharaman also outlined the government’s long-term policy vision for the sector as part of India’s journey toward becoming a developed nation by 2047. Key highlights of the roadmap include:

• Raising NBFC lending to at least 50% of total bank lending by 2047, from the current 24%
• Directing 50% of NBFC credit to high-growth sectors such as green energy, affordable housing, and MSMEs
• Ensuring that 20% of total NBFC lending is conducted under the co-lending framework with banks
• Mandating digital adoption across all NBFCs, backed by a common minimum technology standard
• Institutionalising the co-lending model, which she noted is already delivering promising results

To improve customer experience and operational efficiency, the Minister proposed the creation of digital co-lending platforms, unified onboarding protocols, and interoperable systems.

Sitharaman also acknowledged the progress of larger NBFCs in aligning with bank-level governance and compliance norms and reassured the industry of the government’s continued support in addressing regulatory and operational concerns.

In closing, she urged NBFCs to ensure that benefits from policy reforms and digital innovations are passed on to the end consumers, particularly small borrowers who rely heavily on accessible and fair credit.

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