Non banking finance companies (NBFCs) will have to reduce their overseas exposure soon.

Reserve Bank of India and Government of India are likely to bring limits on the amount of guarantee an Indian NBFC can offer to its foreign subsidiaries.

Soon after the global economic slowdown in 2008, NBFCs had started offering guarantee to support their foreign subsidiaries. This alarmed the RBI as in a way the Indian NBFCs were increasing their exposure to foreign liabilities.