DFS to discuss NBFC-to-bank conversion
February 25, 2026
Government officials will meet top non-banking financial company executives on Thursday. The discussion will focus on sector issues. A key topic is the possibility of NBFCs converting into full banks. This aims to boost financial inclusion under the Viksit Bharat Mission 2047. Capital availability and liquidity for NBFCs will also be reviewed. Suggestions on RBI's IWG report may be sought.
Synopsis
Government officials will meet top non-banking financial company executives on Thursday. The discussion will focus on sector issues. A key topic is the possibility of NBFCs converting into full banks. This aims to boost financial inclusion under the Viksit Bharat Mission 2047. Capital availability and liquidity for NBFCs will also be reviewed. Suggestions on RBI's IWG report may be sought.
The Department of Financial Services will meet top executives of leading non-banking financial companies (NBFCs) on Thursday to discuss sectoral issues, including their possible conversion into full-fledged banks to boost the government's mission to deepen financial intermediation under the Viksit Bharat Mission 2047.
The meeting will also look at capital availability and liquidity for the sector, including the exposure to micro-finance companies, said people familiar with the developments. The other self-regulatory organisations (SRO) invited include the Finance Industry Development Council (FIDC), the Microfinance Institutions Network (MFIN) and Sa-Dhan. "There is a broader push to strengthen credit delivery and diversify the banking landscape, particularly as NBFCs play a critical role in serving underserved segments such as MSMEs and microfinance borrowers," said an official, adding that fresh suggestions from the NBFCs may be sought on the recommendations of the Internal Working Group (IWG) Report on NBFCs constituted by the RBIin 2020. "There is a view that some large eligible NBFCs should consider applying for a banking licence," said another official. The other issues to be discussed include streamlining of KYC verification and customer grievance redressal mechanism. Under current regulations, existing NBFCs that are 'controlled by residents' and have a successful track record of at least 10 years are eligible to seek a banking licence, subject to meeting fit-and-proper criteria and other regulatory conditions.
The FY27 budget proposed setting up a high-level committee on banking for Viksit Bharat, which will undertake a comprehensive review of the financial sector - including banks and non-bank lenders, aligning them with growth, stability, and inclusion goals.
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Government officials will meet top non-banking financial company executives on Thursday. The discussion will focus on sector issues. A key topic is the possibility of NBFCs converting into full banks. This aims to boost financial inclusion under the Viksit Bharat Mission 2047. Capital availability and liquidity for NBFCs will also be reviewed. Suggestions on RBI's IWG report may be sought.
The Department of Financial Services will meet top executives of leading non-banking financial companies (NBFCs) on Thursday to discuss sectoral issues, including their possible conversion into full-fledged banks to boost the government's mission to deepen financial intermediation under the Viksit Bharat Mission 2047.
The meeting will also look at capital availability and liquidity for the sector, including the exposure to micro-finance companies, said people familiar with the developments. The other self-regulatory organisations (SRO) invited include the Finance Industry Development Council (FIDC), the Microfinance Institutions Network (MFIN) and Sa-Dhan. "There is a broader push to strengthen credit delivery and diversify the banking landscape, particularly as NBFCs play a critical role in serving underserved segments such as MSMEs and microfinance borrowers," said an official, adding that fresh suggestions from the NBFCs may be sought on the recommendations of the Internal Working Group (IWG) Report on NBFCs constituted by the RBIin 2020. "There is a view that some large eligible NBFCs should consider applying for a banking licence," said another official. The other issues to be discussed include streamlining of KYC verification and customer grievance redressal mechanism. Under current regulations, existing NBFCs that are 'controlled by residents' and have a successful track record of at least 10 years are eligible to seek a banking licence, subject to meeting fit-and-proper criteria and other regulatory conditions.
The FY27 budget proposed setting up a high-level committee on banking for Viksit Bharat, which will undertake a comprehensive review of the financial sector - including banks and non-bank lenders, aligning them with growth, stability, and inclusion goals.
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