Decision on licences for NBFCs soon: FM

Finance Minister Pranab Mukherjee today said a decision on banking licences for Non-Banking Finance Companies (NBFCs), including micro finance institutions, would be taken soon.

“After contacting major stakeholders, the Reserve Bank of India will take a decision soon,” Mukherjee said at Raghunathganj in Murshidabad district. He was speaking on the sidelines of the inauguration of ‘Swavalamban’ – a new pension scheme for the unorganised sector, administered by the Pension Fund Regulatory and Development Authority and facilitated by Life Insurance Corporation of India.

“RBI is considering new bank licences to promoters in the private sector and also NBFCs, if they meet the eligibility criteria,” Pranab Mukherjee had said while presenting the annual Budget for 2010-11 in the Lok Sabha.

Unlike banks, all NBFCs cannot accept demand deposits. Only NBFCs that hold a valid certificate of registration with the authorisation to accept public deposits can do so.

Mukherjee also said banks should increase lending in the drought-hit areas of West Bengal, Jharkhand and Bihar, so that bank loans could be extended to affected farms to start sowing the rabi crop early.

“We have to assess how fast farmers can start work on rabi crop and what amount of loan they need,” he said.