Buch shared that a significant number of AI-driven projects are already underway within SEBI. A primary application of AI will be to streamline the processing of IPO and MF applications, which will enable faster approvals. “One of the key utilizations of AI that we are deploying is to do faster processing of all applications so that we can turn this around even faster,” Buch stated.

She also pointed out that as of November 2024, only two IPO applications had been pending approval for more than six months, a major improvement from the eight IPO applications still waiting for approval in March 2022. Similarly, for Mutual Funds, only one application was awaiting approval for over six months by November 2024, down from a staggering 69 in March 2022.

Buch emphasized that the introduction of AI technology will further enhance the efficiency of the approval process for IPOs and MFs. She also highlighted the thriving Indian IPO market, noting the substantial volume of applications coming in every week. “In the last nine months, we’ve seen equity raise approximately 3.3 lakh crores. We expect to reach around 4.3 lakh crores by the end of the year,” she added.

While capital raising through equity has witnessed a steady increase in recent years, Buch acknowledged that certain issues, such as preference and rights issues, occasionally go unnoticed in the primary market. To address this, SEBI has introduced measures like the Fastrack rights issue, followed by a preferential issue.

The SEBI chairperson also spoke about the importance of a Rs 250 systematic investment plan (SIP) for mutual funds to promote financial inclusion. “Just as capital formation is vital for economic growth, inclusion is equally important. Hence, the proposed Rs 250 SIP is essential to enhance financial inclusion,” she explained. Buch urged Challa Sreenivasalu, chairperson of the State Bank of India, to help popularize the micro-SIP initiative within the bank’s mutual fund business.

The Rs 250 SIP initiative is set to be launched soon, although the official date has not yet been confirmed.

Furthermore, Buch discussed the growth potential of Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and municipal bonds, forecasting significant expansion for these investment vehicles over the next decade.

Finally, she remarked on the increasing weight of India in the MSCI Index, which has led to a proportionate share of global passive funds flowing into Indian equity markets. As a result, Indian equities now attract about 20% of global passive fund inflows, part of the broader emerging market index.

This move to enhance the efficiency and inclusiveness of India’s capital markets reflects SEBI’s commitment to fostering growth and financial inclusion while leveraging modern technological tools like AI.

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The Grameen Bharat Mahotsav 2025 will kick off at 10:30 AM today at Bharat Mandapam, New Delhi. In addition to inaugurating the event, PM Modi is also scheduled to address the gathering. The theme of this year’s Mahotsav is ‘Building a Resilient Rural India for a Viksit Bharat 2047,’ reflecting the government’s vision for a sustainable and thriving rural economy.

The Mahotsav, which will run from January 4 to 9, is aimed at celebrating Rural India’s entrepreneurial spirit and cultural heritage. It will serve as a platform for discussions, workshops, and masterclasses, with a focus on enhancing rural infrastructure, building self-reliant economies, and fostering innovation in rural communities. According to an official statement from the Prime Minister’s office, the festival will play a vital role in promoting economic stability and financial security in rural areas, with particular attention to the North-East region.

The event aims to address financial inclusion and promote sustainable agricultural practices, two crucial elements in ensuring the long-term prosperity of rural populations. A special emphasis will be placed on empowering rural women through entrepreneurship, offering them the tools to contribute more effectively to their communities’ economic growth.

Moreover, the Grameen Bharat Mahotsav will bring together key stakeholders from various sectors, including government officials, thought leaders, rural entrepreneurs, artisans, and rural community members. These stakeholders will collaborate to create a roadmap for collective rural transformation. The festival will also feature vibrant cultural performances and exhibitions showcasing India’s rich heritage, providing a glimpse into the traditions that make rural India unique.

In a related development on Friday, PM Modi inaugurated 1,675 newly constructed flats for residents of Jhuggi Jhopri (JJ) clusters under the In-Situ Slum Rehabilitation Project. He also handed over keys to eligible beneficiaries at Swabhiman Apartments in Ashok Vihar, Delhi, further demonstrating the government’s commitment to improving the living conditions of urban poor communities.

As the Grameen Bharat Mahotsav unfolds, it is poised to become a significant event in shaping India’s rural future, advancing the Prime Minister’s vision of a developed, self-reliant India by 2047.

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Despite the promising developments, reports suggest that the pace of NBFC growth may slow down in FY25. According to a Nomura report, the strong growth in assets under management (AUM) seen in FY2023 and FY24 appears to be waning, and this trend could persist into FY25. The slowdown is attributed to several factors, including reduced loan disbursements, concerns over the asset quality of unsecured loans (such as personal loans, credit cards, and microfinance), and tightening regulatory oversight.

The Reserve Bank of India (RBI) has also raised concerns over the sector’s heavy reliance on banks for funding. Diversifying funding sources has been flagged as a critical strategy for mitigating risks and ensuring long-term stability.

While challenges such as inflation, geopolitical tensions, and supply chain disruptions in 2024 cast a shadow over the economy, NBFC leaders remain cautiously optimistic about the coming year. Growth opportunities are expected to emerge in key sectors, including Micro, Small, and Medium Enterprises (MSMEs), NBFC financing, and green finance.

MSMEs: A Growth Catalyst for NBFCs

The MSME sector, a cornerstone of India’s economy, has shown remarkable resilience amidst economic challenges. NBFCs are poised to tap into the growing demand for financing in this sector. According to global financial services company Nomura, specific segments like small and medium enterprise (SME) loans, loans against property (LAP), and used vehicle financing are expected to maintain positive growth momentum, despite the overall slowdown.

Navin Saini, Chief Business Officer—MSME and Retail Lending at Arka Fincap, remains optimistic about the MSME financing landscape. He highlighted the importance of proactive risk management, technology adoption, and alignment with government initiatives as key strategies for NBFCs to sustain healthy portfolios in the evolving MSME space.

Embracing Technology and Lowering Costs

Jitendra Tanwar, Managing Director & CEO of Namdev Finvest, emphasized the role of technology in reducing operational costs. He pointed out that NBFCs have been instrumental in advancing financial inclusion, contributing significantly to lending for MSMEs and underserved communities in 2024. In the coming years, leveraging technology will be essential for optimizing costs and enhancing the efficiency of operations.

Ankit Modi, Managing Director of SalaryOnTime, echoed these sentiments, emphasizing the role of digital transformation in reshaping financial services. As India’s economy rebounds, the demand for credit from salaried professionals, alongside growth in retail, MSME, and infrastructure sectors, will drive NBFC growth.

Challenges and Opportunities for Operational Efficiency

Vikkas Goyal, founder of Rupee112, underscored the importance of operational efficiency in navigating the challenges ahead. While opportunities abound, compliance pressures and asset quality concerns will require NBFCs to focus on consolidation and improving operational effectiveness. He also stressed that NBFCs need to diversify their portfolios, balancing growth with risk while forging strategic partnerships with fintech companies and embracing digital lending innovations.

Green Finance and Sustainability: A Bright Future

Sustainability is becoming an increasingly important driver for NBFC growth. The push for green finance is accelerating, particularly in sectors like electric vehicle (EV) financing. India’s growing adoption of EVs, supported by government incentives and subsidies, has led to significant growth in this segment. Nehal Gupta, Founder and Managing Director of Accelerated Money For U, observed that the green finance sector has gained momentum in 2024, with double-digit growth in EV financing, particularly in tier-2 and tier-3 cities.

Real Estate and Home Loan Market: Positive Shift Ahead

The real estate and home loan markets also show signs of positive movement in 2025. Atul Monga, CEO & Co-Founder of BASIC Home Loan, noted that after facing challenges such as high interest rates and rising property prices, borrowers might finally experience some relief. The RBI’s decision to hold rates steady in 2024, coupled with potential rate cuts in 2025, could ease borrowing costs.

Moreover, the government’s focus on affordable housing under PMAY Urban 2.0 is expected to provide significant momentum to urban housing development. On the technological front, home loan processing is on the verge of a digital revolution, promising faster, more transparent, and user-friendly services.

Looking Ahead: A Transformative Year for India’s Financial Ecosystem

As India prepares to enter 2025, the convergence of technological advancements, supportive government policies, and a focus on sustainability promises to reshape the country’s financial ecosystem. The continued evolution of sectors like MSMEs, NBFCs, and green finance presents significant opportunities for growth, but it will require a collaborative effort between regulators, industry stakeholders, and fintech innovators to build a balanced and resilient economy.

NBFCs are well-positioned to play a pivotal role in this transformation, provided they embrace innovation, streamline operations, and align their strategies with government initiatives. 2025 holds great potential for the sector, marking a new era of growth and financial inclusion in India.

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