The Reserve Bank of India said it would intensify its scrutiny of nonbanking finance companies to ensure better compliance and financial strength, but did not indicate an asset-quality review like the one carried out on banks. NBFCs showed high growth taking advantage of the poor financial health of several public sector banks but the recent default by the group firms of non-bank lender IL&FS raised alarm and called for a reality check. Former chief economic advisor Arvind Subramanian suggested asset quality review (AQR) for these lenders to fully measure the extent of the hidden stress in the system. “Like Raghu (former governor Raghuram Rajan) did an AQR for the banks, we need to an asset quality review for the NBFCs,” he told ETNow in December. RBI data showed that NBFCs cumulatively had loans assets worth ?3.42 lakh crore at the end of September with industry accounting for more than half of total credit extended by them, followed by retail, services and agriculture. T