NEW DELHI, FEB 9: The newly constituted Narasimham Committee will soon announce revised guidelines for non-banking finance companies, stated C M Vasudev, special secretary (banking) while inaugurating a workshop on NBFCs organised by the Federation of Indian Chambers of Commerce and Industry.The government wants to nurture the NBFCs as it has played a vital role in the financial sector. There is a need to develop a wide range of financial intermediaries and set up an efficient supervisory system, he said. This has become necessary as the industry is being viewed with suspicion, he added.
The recent guidelines of the RBI have been formulated to bar companies with a suspect background from duping investors. The guidelines have linked an NBFC's capacity to raise deposits to the rating it has received from any of the three rating agencies.
Regarding the deposit insurance scheme the worldwide experience has not been in favour of the deposit insurance as it leads to subsidising the inefficient part of thesector at the cost of efficient units, Vasudev said.
Speaking on the occasion, T Bandopadhyay, chief general manager, RBI said last year 37,500 NBFCs applied for registration. And out of these companies only 1,869 submitted regular returns and accepted public deposits. The hue and cry that has been raised is motivated, unrealistic and far fetched.
The mushrooming growth of NBFCs from a few to an enormous figure has been promoted by manipulative tendencies.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
