Mumbai: RBI deputy governor J Swaminathan asked NBFCs to bolster governance and assurance functions as well as maintain constant vigil against potential risks and vulnerabilities.He was speaking at a conference organises by RBI in Mumbai for the chief compliance officers, chief risk officers and heads of internal audit of select NBFCs. The conference was held in the wake of RBI taking action against two NBFCs for irregularities in gold loans and loans against securities. The regulator had also pulled up NBFCs for unfair practices in charging interest rates. Swaminathan said that in the dynamic and challenging environment where financial entities operate, they are exposed to a multitude of risks that can impact their financial and operational resilience.He highlighted cybersecurity and operational risks, credit risks from rule-based credit models, and liquidity risks. Banking sources said that while clear guidelines are in place, supervision of NBFCs has revealed that there are issues regarding conduct which has highlighted the need for getting tough on compliance.The deputy governor also conveyed RBI’s supervisory expectations from the entities to ensure independent and meaningful assurance…
