Usha Thorat, chairperson of the Reserve Bank of India?s (RBI) panel on finance companies, has said that the Reserve Bank of India (RBI) is not being unfair to non-banking financial companies (NBFC) when it comes to priority sector lending norms, according to a release by Indian Merchant’s Chamber (IMC).
Responding to the industry players, she said consumers? protection is a strong regulatory objective and the proposed recommendations of a working group report on NBFC have come from two main premises namely, funding risk and concentration.
?The risk is associated in wholesale funding to select sectors and a similar risk exists in concentration on a particular industry. Though, concentration on a specific sector develops expertise of NBFCs in that sector, but downturn in any of such sectors, could pose greater risk,? she said.
R Sridhar, MD, Shriram Transport Finance Company, however, argued: ?The cost of borrowing has gone up by about 50%in last few years. Our cost to consumers has also gone up. If due attention is not paid to NBFCs, the small borrowers would be forced to go back to the moneylenders.?
