Accordingly the RBI's Financial Stability Report on Thursday warned that the failure of large housing finance companies (HFCs) and non-banking finance companies (NBFCs) can cause more and higher losses comparable to the banks, underlining the need for greater surveillance and monitoring as the need of the hour. The Bank said in its latest FSR report "Solvency contagion losses to the banking system due to idiosyncratic HFC/NBFC failure show that the failure of largest of these can cause losses comparable to those caused by the big banks, underscoring the need for greater surveillance over large HFCs/NBFCs". 

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When referring the NBFC near crash-outs, it said "Recent developments in the non-banking financial companies (NBFC) sector have brought the sector under greater market discipline as the better-performing companies continued to raise funds while those with ALM and/or asset quality concerns were subjected to higher borrowing costs."



Moreover as on March 31, 2019, there were 9,659 NBFCs registered with the RBI, of which 88 were deposit-accepting and 263 systemically important non-deposit accepting NBFCs. Reportedly in the CP market, the RBI said the absolute issuances by NBFCs have declined sharply, relative to the pre-IL&FS default level. Apparently according to the apex bank, the registrations were cancelled between May 10 and June 11.


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