Harmonisation of NBFCs to ease regulatory complications, say experts

As the IL&FS group defaulted on its debt obligations, the NBFC sector earned a bad reputation for itself and also went through a period of liquidity tightening

In its endeavor to replace entity-based regulations with activity-based regulations, the Reserve Bank of India decided to harmonise major categories of non-banking financial companies (NBFCs) engaged in credit intermediation into a single category.

Experts are of the opinion that this move will provide operational ease for both the regulator and the NBFCs but will not have any larger impact on the sector.

“It may get easier for the central bank to operationally monitor these NBFCs after the harmonisation,” said Karthik Srinivasan of ICRA. But he said the move  is directly not going to affect the liquidity easing for NBFCs.

The RBI, on Thursday,