•  Recognition of the possibility of systemic risk in the absence of proper assessment of counterparty risk and well functioning securities markets with greater transparency. •  Focused attention on the role of the regulator which ensures adherence to regulations in letter and spirit and need for greater accountability.
Imbroglio caused by dealings of Non-Banking Financial Companies in 1997 Non-Banking Financial Companies (NBFCs) have been historically subjected to a relatively lower degree of regulation vis-à-vis the banks, the higher rates of return on deposits they could offer enabled them to attract a large base of small savers and a potential threat to the stability of the financial system.