Financial services major Bajaj Finserv's chief Sanjiv Bajaj on Wednesday said NBFCs must be subjected to the right regulations as that would give consumers greater confidence about the companies working under an effective regulatory watch.
Dismissing concerns about the financial services sector being worried over recent attempts to tighten regulations, Bajaj said the digital world is anyway changing the way business is done and a lot of businesses and innovations do not require any government or regulatory intervention anymore.
"As long as we are within regulations, for example of insurance regulator IRDAI, there is no restrictions from the government side on innovating in the way business can be done," he said.
He said non-banking financial companies (NBFCs) have always seen lighter regulations though they have been doing 70 per cent of the work done by a bank.
"Therefore, some kind of tightening of regulations for them is not bad at all, as it also send the right message to consumers and other stakeholders about these entities are working under the right regulatory framework," said Bajaj, who heads one of biggest NBFCs in the country.
He said there are thousands of NBFCs in India as against just about a hundred banks and they have been working with a lighter set of regulations for a long time.
At the same time, he said, the days of 'License Raj' are completely gone as that mostly pertained to traditional businesses and anyway not many business activities require a difficult-to-get licence any more.
The country's NBFC sector has been facing a crisis of confidence following IL&FS defaulting on debt repayments late last year.