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| With Rs 630k-cr debt, MFs and NBFCs need bailout: Kamath | |
| Press Trust of India / New Delhi November 2, 2008, 19:15 IST | |
Warning that mutual funds and non-banking financial institutions with an exposure of Rs 630,000 crore could crumble under high interest costs, CII President K V Kamath today asked the government to save the crucial financial sector to save the economy.
"I think there is an immediate and urgent need to look at how these institutions are funded and address this critical point. We also need to see how we provide them soft lending. I am saying, let us recognise there is a problem here," Kamath, who is also CEO and Managing Director of ICICI Bank, told PTI in an interview.
Asked if the mutual funds and NBFCs needed a bailout rather than the banks, he said 'exactly' while terming them as 'vulnerable' going by the size of the debt that the two sectors collectively have.
"There is no need for a bailout package for the Indian banking system but the bailout package could be required for mutual funds and NBFCs.
"We have a situation, where the two have a corpus of debt or money lent out at around Rs 630,000 crore. The number I have roughly on mutual funds' debt side is around Rs 250,000 crore and NBFCs non-deposit taking is Rs 380,000 crore," he said.
Kamath said that he would raise this, along with the issues of liquidity and corporate India's concern over the weakening of rupee, during Prime Minister Manmohan Singh's meeting with industrialists on Monday.
"Some of these issues Confederation of Indian Industry (CII) has already flagged. But I think I have articulated to you my broad thinking which is what I will table. One more thought I would like to share is that of rupee weakening. This is a concern in the minds of Corporate India," he said.
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