• Rajib Dutta

If Banking Industry is the ‘mover’ in any economy, Shadow Banking (especially the Non Banking Finance Institutions/Corporations) is but the vital cog in its armoury. Non-Banking Financial Institutions/Companies (NBFIs/ NBFCs) are entities or institutions that provide certain bank-like and financial services, but do not hold a banking license. NBFCs/NBFIs play many essential roles that banks fail to act upon. They provide complementary services to the economy. Indeed this ‘shadow banking’ industry running parallel to the Banking industry provides a bigger challenge for the Regulator. According to the RBI Financial Stability Report, 2018, the Non Banking Financial Services is the Biggest single most entity that owes money. Be it the absence of reclassification option, or re-financing tools, lack of capacity-building or lack of statutory recovery tool, to limited leverage ratio – all played their roles to get the shadow banks mired into a full blown crisis. The importance of the NBFC contributions to the Indian economy also made the Central Bank Governor state that, ‘It is our endeavour to have an optimal level of regulation and supervision so that NBFCs are financially resilient and robust’.

Shadow Banking, Non Banking Financial Corporations, Reserve Bank of India, NBFC Crisis, Regulation, Solutions

"Shadow Banking in India and The Lender of Last Resort ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.7, Issue 8, page no.727-737, August-2020, Available :http://www.jetir.org/papers/JETIR2008093.pdf

"Shadow Banking in India and The Lender of Last Resort ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.7, Issue 8, page no. pp727-737, August-2020, Available at : http://www.jetir.org/papers/JETIR2008093.pdf