Government has decided to set up two committees to examine the feasibility of a single regulator for non-banking finance companies and chit funds and for strengthening the rural credit. The committee for examining the possibility of a single regulator would be headed by secretary (financial sector) D C Gupta, while the one on rural credit would be chaired by Minister of State for Finance (banking and insurance) Anant Geete. The committees are required to submit the suggestions in four weeks’ time, Finance Minister Jaswant Singh said after attending his first Parliamentary Consultative Committee meeting for Ministry of Finance. Singh said the existence of many regulators for similar financial operations like NBFC, private companies and chit fund caused confusion and created hindrances in checking irregularities. “The secretary (financial sector) has been directed to examine if a single regulator was feasible,” he said. On rural credit, the committee felt that banks should focus more on small scale industry, agriculture and rural industry. The members also expressed concern over the increasing non-performing assets of commercial banks which stand at over Rs 56,000 crores and asked the government to tackle the situation. Citing the high default rate, Singh said an environment was imperative and the recent ordinance on setting up of asset reconstruction companies and securitisation was aimed at providing the banks and FIs a window to market their NPAs.
