"At the heart of Reserve Bank of India’s (RBI) discussion paper, ‘Revised Regulatory Framework for NBFCs’, released last Friday, is its concern that the problems of non-banking financial companies (NBFCs) should not result in systemic risk and endanger financial stability. Not only because financial instability can threaten economic stability (as seen after the Lehman Brothers collapse in 2008), but also because any spillover of problems from NBFCs to banks impacts the health of banks with far reaching consequences. Most importantly, the failure of a large enough bank represents a potential claim on taxpayer money."