Further in the absence of any prudential norms or ceilings, several non-bank finance companies made poor investment choices, leading to high level of NPAs, liquidity crunch and consequent significant default in repayment of deposits. Therefore, some further regulatory action was taken including registration of these companies, for which the statutory powers were given to the RBI through the RBI (Amendment) Act in January 1997.
The current balance sheet is composed of Treasury securities and a significant amount of agency mortgage-backed securities (MBS). Since the longerterm goal of the balance sheet reduction plan includes a Treasuries-only balance sheet, it would make sense to eventually incorporate MBS sales into the plan so that reaching this  -5goal does not take too long.