Forestalling and where necessary, decisively resolving such episodes becomes a key focus of our regulatory and supervisory efforts. 3|Page  Scale Based Regulatory Approach 9. Before we discuss further, it would be interesting to make an assessment as to where the Indian NBFC sector stands with respect to significance, activity and regulation as compared to global jurisdictions.
The Global monitoring report on NBFI by Financial Stability Board (FSB) classifies non-banking financial activities into five economic functions, (i) collective investment vehicles, (ii) loan companies which depend on short-term funding, (iii) market intermediaries, (iv) entities which engage in facilitation of credit creation (such as credit insurance companies, financial guarantors) and (v), entities undertaking securitisation-based credit intermediation.