FIDC pitches for partial functioning of NBFCs during lockdown

The FIDC, an association of finance companies, has requested the government to allow partial functioning of NBFCs amid the lockdown so as to help people in rural areas access funds.

Banks, insurance companies, stock markets etc are included in the list of essential services during the lockdown, while non banking financial companies (NBFCs) have been excluded.

In a letter addressed to the Home Secretary, the Finance Industry Development Council (FIDC) has requested the government to issue necessary advisory that the essential operations of NBFCs are continued on par with banking operation and to facilitate the essential staff to provide essential services to the stakeholders.

"Keeping in mind the interest of our stakeholders, in particular fixed deposit holders, debenture holders, employees, Institutions and Banks it is necessary that certain essential staff may be permitted to carry out the essential operations, in small number and at staggered timings while following social distancing," it said.

In view of the special circumstances, it is necessary that essential staff may be required to be physically present in the branch offices as they cannot work from home for the collections, depositing cash in banks, etc, it said.

Further, it may be noted that commercial banks are functioning for limited hours with only limited resources whereas the fund requirements of customers are growing at a rapid pace which are currently being addressed by the unorganized sector which is not subject to any kind of supervision by regulatory authorities.

"We wish to impress upon that most of our member companies have offices and operations across the nation. If at least 30 per cent of our staff are permitted to be operative on rotation basis, we can cater to the rising financial requirements of a larger segment of lower and middle income customers during this challenging time," it said.

The NBFC or the shadow banking industry has been demanding special liquidity line to NBFCs from banks as well as a significant allocation from the RBI's targeted long-term repo (TLTRO) operations mandatorily flowing to the sector.

It has been also pitching for a three-month moratorium on loans given to NBFCs by lenders.