Rising Trends In NBFC Sector

Non-banking financial companies ("NBFC") have undergone significant transformation over the past few years. Liberalisation of the legal regime, increasing digitisation and rising financial inclusion have given a boost to innovation, growth and investment in the financial sector.

Regulatory changes

Last year, the government liberalised the financial services sector by permitting 100% foreign direct investment in the financial sector under the automatic route, subject to the relevant entity being regulated by the Reserve Bank of India ("RBI") or other financial sector regulators. Further, the benefit of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 was extended to 196 NBFCs allowing such NBFCs to enforce security interests on assets charged to them, without having to resort to either judicial or arbitral authorities. Now, the government is working towards harmonising the regulations applicable to various