Nbfc Supervision: Rbi May Not Agree With Khanna Panel

The Reserve Bank of India (RBI) is unlikely to agree to the number of inspections suggested by the Khanna committee for different classes of non banking finance companies (NBFC), according to P R Khanna, chairman of the central banks expert group for designing a supervisory framework for NBFCs, while speaking on the subject of supervision of NBFCs.

The Khanna committee report had mentioned that supervision could be carried in intervals of one, two or three years depending upon the classification of the NBFC.

Speaking at the meeting organised by the Association of Leasing & Financial Services (AL&FS), Khanna said regulations should be minimum.

 

He said the committee appreciated the active role played by the NBFCs in complementing the credit delivery system.

Khanna also emphasised the importance of relying on market intelligence.

Earlier AL&FS director A C Shah said that sheer numbers make it difficult for any regulator to monitor the activities. He pointed out that the RBI machinery was too small to cope with this task. Self regulation by the NBFCs was equally important, he said. In this context the industry association had a role to play in disciplining errant companies.