RBI may relax hire purchase norms

MUMBAI, January 28: The Reserve Bank of India (RBI) might relax some of the norms under the new regulatory framework for equipment-leasing a...

MUMBAI, January 28: The Reserve Bank of India (RBI) might relax some of the norms under the new regulatory framework for equipment-leasing and hire-purchase firms if they face "genuine difficulties". The central bank indicated this at a meeting with representatives of various hire-purchase and leasing companies held on Tuesday.

The meeting, chaired by RBI deputy governor SP Talwar, was called to take stock of the situation after the new norms were announced on January 2. Senior officials of Twentieth Century Finance, Ceat Financial, Sundaram Finance, Lloyds Finance, Tata Finance, Tata Sons, Motor General and Wall Street Finance were present along with a Confederation of Indian Industry (CII) representative.

"They expressed their difficulties and we heard them out," an RBI official said. The companies wanted the Reserve Bank to relax the time-frame for adjusting themselves to the new norms. Instead of making the new norms applicable from December 1998, the companies wanted them to be applicable in threeyears. "This apart, the firms expressed their difficulties in facing gearing ratios. They wanted some relaxation with various gearing ratios," the official said.

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The RBI told the firms they should not accept public deposits to fund their businesses.

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