Context: The collapse of Non-Banking Financial Companies (NBFCs) has recently led to the formulation of regulatory guidelines by the Reserve Bank of India.
Issues with the NBFC Sector:
Reserve Bank of India’s layered regulatory framework for NBFCs: based on - the smaller the size, the more minimal the regulation:
Issues to be Addressed by the RBIs Regulatory Framework
Conclusion: Regulator has to keep in mind that regulation, as it evolves, must remain as minimal as possible while remaining effective.