IL&FS crisis: Experts want RBI to cancel licences of 1,500 smaller NBFCs

Better capitalised and more conservatively run finance firms are likely to swallow up an increasing number of smaller rivals, the experts said

India's burgeoning shadow finance sector is likely to face a shake-up after defaults at one major lender battered the nation's financial markets in the past week and reinforced worries about credit risk.

Industry officials and experts say they expect Indian regulators to cancel the licences of as many as 1,500 smaller non-banking finance companies because they don't have adequate capital, and to also make it more difficult for new applicants to get approval.

The Reserve Bank of India (RBI), which has been tightening rules for non-banking financial companies (NBFCs), did not respond to requests for comment.

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