Traditionally, India has had a bank-dominated financial sector. Even so, there have always been NBFCs. These were in early times small family run businesses for deposits acceptance and lending activities. Even today, the sector may be “small” as compared to banking sector with a total asset size of just around 14 percent of that of scheduled commercial banks (other than RRBs).
However, there is no denying that the sector has grown tremendously over the years in size, form and complexity, with some of the NBFCs operating as conglomerates having business interests spread to sectors like insurance, broking, mutual fund and real estate. Concomitant with the above, interconnectedness and systemic importance of the NBFC sector also have increased. 18.