NBFCs Emerge as Key Credit Engines with Rs 48 Lakh Crore in Loans: Sitharaman

By siliconindia  |  Thursday, 10 July 2025, 08:22:31 AM IST

NBFCs Emerge as Key Credit Engines with Rs 48 Lakh Crore in Loans: Sitharaman
  • NBFCs' gross loan advances doubled from Rs 24 lakh crore in 2021 to Rs 48 lakh crore in 2025.
  • FM Sitharaman called NBFCs a crucial credit source for underserved segments, no longer just 'shadow banks'.
  • Government supports NBFCs through responsive regulation and urges deeper co-lending partnerships with banks.
Finance Minister Nirmala Sitharaman revealed that gross loan advances by Non-Banking Financial Companies (NBFCs) have doubled over the last four years, surging from Rs 24 lakh crore in March 2021 to Rs 48 lakh crore as of March 2025.
Addressing the ‘NBFC Symposium 2025’, the Finance Minister emphasized the growing significance of NBFCs in India’s financial landscape, particularly in serving segments historically excluded from formal credit systems.
“With over 9,000 registered entities, ranging from large infrastructure financiers to niche microfinance and asset-backed lending institutions, NBFCs have become the first point of contact for crores of citizens and small businesses”, Sitharaman stated.
She highlighted recent regulatory changes, such as the restoration of risk weights on bank lending and RBI’s easing of financial conditions, which are expected to bolster credit availability and strengthen the funding environment for NBFCs.
“The RBI’s move to reduce funding costs for NBFCs should translate into better borrowing terms for end-customers. I urge the sector to pass on these benefits”, she said, reaffirming the government's commitment to fostering a responsive policy environment.
The Finance Minister also underscored the need for deeper collaboration between NBFCs and banks through institutionalised co-lending models. She advocated for a seamless digital co-lending architecture, with common onboarding standards and interoperable servicing platforms to improve efficiency and expand credit access in underserved sectors.
“NBFCs are no longer shadow banks. Their increasing regulation and oversight reflect their critical role in the financial system”, she asserted.
She further noted that some systemically significant NBFCs now exhibit governance and compliance standards on par with banks, opening the door for them to transition into full-fledged banking institutions.
Sitharaman assured stakeholders that the government remains committed to a consultative approach and will carefully consider concerns raised by the NBFC community.

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