RBI Seeks Information on NBFCs' Supply Chain Finance Products

The Reserve Bank of India (RBI) has requested details on the supply chain finance products provided by non-banking financial companies (NBFCs) to ensure compliance with regulatory standards. According to sources cited by *Business Standard*, the RBI's Department of Supervision (DoS) has notified several prominent shadow banks, indicating they may need to revise their offerings. Supply chain finance, often offered by NBFCs as term loans ranging from 30 to 180 days, involves each loan tranche being considered a separate term loan within the overall credit limit set for the borrower. This type of financing is primarily used by MSMEs (Micro, Small, and Medium Enterprises) with seasonal or cyclical business needs. In light of these developments, the Finance Industry Development Council has called for a meeting to address the issue. MSMEs, which typically do not have capital-intensive business models but require working capital, usually