It may not be out of place to say that the regulatory framework for NBFCs has remained a work in progress and it continues to be so. The fundamental premise has, however, been to allow operational flexibility to NBFCs and help them grow and develop expertise. 13.
Now, the non-banking sector has grown significantly and several NBFCs match the size of the largest Urban Cooperative Bank or the largest Regional Rural bank. In fact, few of them are as big as some of the new generation private sector banks. Further, they have become more and more interconnected with the financial system.