NBFCs ask for new funding

Non-banking financial corporations (NBFC) want the Reserve Bank of India to offer them an alternate funding source, along the lines of the National Housing Bank or Small Industries Development Bank of India.

Their appeal follows the credit policy, which wants NBFCs to phase out acceptance of deposits.

NBFC biggie Sundaram Finance's managing director T T Srinivasa Raghavan said on the sidelines of the CII quality summit at Bangalore that NBFCs have already met with the RBI's guidelines regarding this. While the credit policy announcement was a statement of intent, he said, it was against the grains of liberalisation.

However, NBFCs have other alternatives too as more avenues are opening up and the debt market is deepening. As for investors, the move will block a lucrative avenue for saving.

According to estimates, public deposits with NBFCs stand at Rs 3,500 crore, with the top 20 alone accounting for 90 per cent of this. Sundaram Finance's deposit portfolio stands at Rs 650 crore now.