The Finance Industry Development Council (FIDC) said it will continue its endeavour to act as an industry watchdog to prevent, reduce, and correct instances of questionable business practices through persuasion and consensus-building among member NBFCs.
The Council, which is a representative body of the RBI-registered NBFCs, underscored in its Vision document for the next two years, that it will play a significant role in ensuring a high degree of corporate governance, adherence to regulatory norms, and fair market practices among its members.
FiDC will continue its endeavour to prepare a model code of conduct and encourage compliance among members, per the document.
The Council observed that NBFCs have gained expertise in last-mile credit delivery.
Using NBFCs as financial conduits for financial support delivery would ensure healthy and balanced growth of MSMEs, the agricultural sector, entrepreneurs, and the affordable housing sector while keeping costs down, it added.
FIDC emphasised that, given the heterogeneity of NBFCs and the relatively lower level of financial literacy of their customers, strong governance and self-discipline of NBFCs are sine qua non for the sustainable economic progress of the country.
FIDC Chairman and Executive Vice-Chairman, Shriram Finance, Umesh Revankar, said, “I am sure the Code of Conduct, as prepared by FIDC with the suggestions of all, will be adhered to by all its members in letter and spirit and will go a long way in promoting self-governance and disciplined growth of the NBFC sector.
“I believe this will be the harbinger of a much greater role played by the NBFC sector in the growth and sustainable financial health of our country.“