RBI is in the midst of tightening rules for lenders who don’t fall under the ‘banks’ category and has told some of the applicants for the finance company licence that it may not issue one till the new rules come into force. It might take RBI two to three months to come out with its new guidelines.
RBI set up a committee under deputy chairman Usha Thorat to finalise a new set of guidelines after raising their capital requirements recently. RBI believes that there is a need to strengthen the supervision of the 12,500 NBFCs in the country due to the high exposure of banks to NBFCs.
The recent global financial crisis has highlighted the regulatory imperatives concerning the non-banking financial sector and the risks arising from regulatory gaps, arbitrage and systemic inter-connectedness. A need was, therefore, felt to reflect on the broad principles that underpin the regulatory architecture for NBFCs keeping in view the economic role and heterogeneity of this sector and the recent international experience.