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Tuesday, January 28, 2020

We’re making a deep-dive into books of top 50 NBFCs: RBI Guv Shaktikanta Das

Sanctions by NBFCs had fallen 34 per cent in the September quarter as the sector is yet overcome liquidity problems.

Written by Khushboo Narayan | Mumbai | Updated: December 6, 2019 4:12:12 am
rbi monetary policy, rbi monetary policy decmeber 2019, rbi monetary policy 2019, NBFCs, NBFC crisis, Shaktikanta Das, Indian express Reserve Bank of India (RBI) Governor Shaktikanta Das. (File photo)

RBI Governor Shaktikanta Das Thursday said the central bank is “regularly monitoring” the top 50 non-banking finance companies (NBFCs) and it “won’t hesitate” to prevent the collapse of any NBFC.

Sanctions by NBFCs had fallen 34 per cent in the September quarter as the sector is yet overcome liquidity problems. “The top 50 NBFCs in India are being regularly monitored. We are making a deep-dive into the books of NBFCs wherever required and know where the vulnerabilities lie,” Das said after the Monetary Policy Committee (MPC) meeting.

He said these 50 NBFCs represent about 75 per cent of the asset size of NBFC. “The management/promoters of vulnerable NBFCs are asked to come to the RBI on periodic intervals, discussions are held. We clearly tell them our expectations of measures that they should undertake to strengthen and get over the problems,” Das said. He added that liquidity requirements of NBFCs for the next three months are being monitored and assured that the RBI “will not hesitate to act.”

On credit flow to NBFCs, Das said it is slowly reviving and better performing NBFCs are being able to access funds at a pre-IL&FS rate.

He said the RBI will intervene as and when required and refer troubled NBFCs for resolution. Das, however, did not comment on the TARP-like initiative for NBFCs. Troubled Asset Relief Program (TARP) was a group of schemes conceptualised and run by the US Treasury Department to stabilise the country’s financial system and counter foreclosures in the wake of the 2008 financial crisis.

With payment defaults and liquidity crunch hitting the financial sector, sanctions by NBFCs fell by Rs 98,752 crore, or 34 per cent, to Rs 195,205 crore during the September quarter of 2019-20 from Rs 293,957 crore in the same period of last year, according to the Finance Industry Development Council (FIDC).

On November 29, the RBI filed the insolvency process against Dewan Housing Finance Corporation (DHFL) at the National Company Law Tribunal (NCLT). DHFL is the first company from the financial sector to be referred to the NCLT.

Das: Steps to monetise Punjab & Maharashtra Cooperative Bank assets

Mumbai: RBI Governor Shaktikanta Das said the forensic audit report on the scam-hit Punjab and Maharashtra Cooperative (PMC) Bank is expected by the month-end, and efforts are also on to assess the realisable value of assets held by the cooperative bank that can be monetised.

He said the RBI has also given its suggestions on changes in regulations that are required for regulating the cooperative bank sector better. “There is a forensic audit underway. We will get the report by the end of this month. Assessment of the realisable value of the assets of the bank is also on,” Das said.

He said a coordination mechanism has been put in place consisting of the RBI-appointed administrator and the law enforcement authorities such as the Economic Offences Wing of the Mumbai Police, the Enforcement Directorate and RBI officials for asset valuation. —ENS

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