Nbfcs Asked To Rely Less On Fds

Non-banking finance companies (NBFCs) must reduce their reliance on public deposits and the Reserve Bank of Indias recent measures are aimed at meeting this objective, said C M Vasudev, special secretary (banking) in the ministry of finance.

Excessive reliance on unsecured debt is not healthy, said Vasudev while speaking at the seminar.

After banks, the NBFCs are the largest deposit mobilisers and therefore must be regulated, he said.

He, however, added that the government was not in favour of curbing NBFCs in any way.

Speaking on the occasion, T Bandopadhyay, chief general manager at the RBI said, the NBFCs recourse to public deposits must be reduced.

 

He pointed out that last year around 37,500 companies applied for registration as required by the RBI. Out of these, only 1,869 submitted regular returns and accepted public deposits.

Vasudev told the gathering that the government is awaiting the recommendations of the newly constituted Narasimham committee before introducing further reform measures for NBFCs. This is a continuous process. We are all on the learning process. He said there was a need to develop a wide range of financial intermediaries and a supervisory framework to have efficient NBFCs.