Reserve Bank of India (RBI) Deputy Governor M Rajeshwar Rao criticized non-banking finance companies (NBFCs) for seeking bank licences, stating it is atypical given the regulatory advantages NBFCs already enjoy. Rao expressed displeasure at microlenders misusing regulatory liberties on interest rates and singled out certain peer-to-peer lending platforms for non-compliance with licensing guidelines. While some NBFCs expressed interest in converting to banks, Rao emphasized that regulatory advantages, including easier entry and exit barriers, differentiate them from universal banks. He urged NBFCs to diversify funding sources and reduce reliance on bank loans.