Turning tides: How Arka Fincap’s Group CFO is shaping the future of NBFC finance

NBFCs (Non-Banking Financial Companies) in India face the dual challenge of regulatory compliance and technological transformation. For Arka Fincap’s Group CFO Amit Gupta, adapting to these trends has been a journey marked by innovation and resilience. In this exclusive interview, Amit discusses the strategies that have enabled his finance team to navigate economic uncertainties, implement risk management frameworks, and embrace data-driven decision-making—all while maintaining robust liquidity and a granular portfolio.

Below are the edited excerpts:

Q: What key trends and regulatory changes in the NBFC sector have impacted your finance function over the past few years? How are you positioning your finance team to adapt to these shifts in the financial ecosystem?

Amit: Over recent years, the finance function within NBFCs has undergone significant evolution. Regulatory amendments, though challenging in the short term, ultimately strengthen the industry for sustainable growth. At Arka, every new guideline is thoroughly evaluated and swiftly integrated by the relevant teams to ensure timely compliance.

Key regulatory changes have included the adoption of IND AS, the introduction of Scale-Based Regulations (SBR), and the implementation of liquidity coverage ratios (LCR). Our finance team has adapted by streamlining processes around asset-liability management, updating regulatory reporting frequencies, and prioritising technology upgrades that digitise our workflows and enhance disclosure practices.

The overarching transformation within the finance function touches all aspects—liquidity, governance, risk monitoring, and customer-centric approaches. I firmly believe that robust fundamentals are the foundation of scalable growth, and our team’s agility has been vital in adapting to these ongoing changes.

Q: Could you share insights into how Arka’s finance function manages risk, especially in light of recent economic uncertainties?

Amit: Transparency is fundamental in our approach to risk management. We address a range of risks, from asset quality to governance and liquidity, by deploying robust tools and processes. Among these, our Early Warning Signals (EWS) mechanism and Power BI analytics enable continuous data monitoring, providing essential insights at every stage of the customer journey.

The entire workflow, from origination to disbursement and monitoring, is digitally streamlined, reducing human intervention and ensuring accuracy. Regular internal audits further ensure the robustness of these systems, reinforcing our commitment to risk transparency and operational excellence.

Q: Maintaining a granular portfolio is crucial for NBFCs. How does your finance team approach this, and what strategies do you implement to manage portfolio risk?

Amit: A granular portfolio is a key priority for us, as it enhances risk diversification and strengthens our leverage potential. We monitor portfolio concentration meticulously, implementing regular reviews and aligning closely with our business teams to address any concentration risks as they arise.

Diversification remains equally important on the liability side, and we adhere to RBI guidelines to maintain balanced asset-liability exposure. Our strategy includes diversifying lender relationships and ensuring that our funding sources are resilient, supporting continuity even under adverse conditions.

Q: With technology transforming financial operations, how has your company’s finance function leveraged automation, data analytics, or AI for more efficient decision-making?

Amit: Since inception, we have employed a low-code/no-code technology framework, enabling agility and cost efficiency. Hosted on the cloud, our infrastructure follows a pay-as-you-go model, which allows us to optimise resources dynamically. This approach, combined with SaaS-based applications, ensures scalability without the heavy burden of CAPEX.

Our systems, including Loan Origination and Management, Accounting, and Expense Management, are fully interconnected. This integration reduces operational costs, boosts efficiency, and enables seamless data flow across the organisation, enabling quicker and data-driven decision-making.

Q: Treasury management and corporate finance are your core expertise. How are you optimising these areas in your company to support liquidity and long-term financial health?

Amit: Drawing on extensive experience in treasury and corporate finance, I have instilled best practices tailored to Arka’s strategic goals. Given recent market developments and regulatory demands, treasury management has become a Board-level priority. We’ve diversified our funding sources and established a lender network that includes over 30 prominent banks and financial institutions.

Our cautious, liquidity-focused philosophy ensures stability, and we maintain adequate capital reserves to support growth. Through various tenors and instruments, we optimise borrowing costs, enabling the business to perform effectively.