RBI governor Shaktikanta Das met representatives from non-banking financial companies (NBFCs) and housing finance companies to discuss the liquidity crisis in the sector and assured them of addressing genuine concerns.
A delegation of Associated Chambers of Commerce and Industry of India (Assocham) requested him to allow more leeway in fundraising by NBFCs. According to NBFCs, over-regulation is hampering the growth of the sector.
The delegation said NBFCs have a unique model of lending and that has to be recognised by the regulator, instead of over-regulating the sector. They suggested that the RBI should reduce the minimum holding period to 3 months for loans having maturity of 2-5 years, change MUDRA norms for refinancing NBFCs, and also allow systemically important NBFCs to accept public deposits.
Among other suggestions, NBFCs proposed a liquidity window against the sale of secured loans, and demanded access to various crucial databases at par with banks.
To facilitate easy borrowing from banks, the NBFCs also called for reduction of the risk weight for loans given to the sector by banks.
Finally, the delegation suggested that the central bank restores treating bank funding to NBFCs and HFCs for on-lending to priority sector as priority sector lending for banks.