The Reserve Bank of India (RBI) has sought details on the supply-chain finance offerings of non-banking financial companies (NBFCs). Industry sources said the RBI’s Department of Supervision has told a few leading shadow banks that they may have to rework these offerings.
NBFCs extend supply-chain finance as term-loans typically ranging between 30 days and 180 days with each tranche a distinct term-loan in itself within the overall credit limit determined by the NBFC of a borrower. These facilities are mostly availed of by micro-small and medium enterprises (MSMEs) with seasonal or cyclical businesses for their peak credit requirements or short term.