The Reserve Bank of India (RBI) on Monday dispelled fears of the non-banking financial companies (NBFCs) sector that the proposed recommendations of the Usha Thorat committee to maintain an asset size of Rs.25 crore will lead to the closure of small and mid size NBFCs in the
country.
“They (NBFCs having less than Rs.25 crore asset size) will neither be registered nor be regulated, but, because they are already registered, they will be given sufficient time to come to that standard,” said Anand Sinha, deputy governor, RBI, addressing the seminar organised by the Indian Merchant Chamber on the issues concering the NBFC sector.
The central bank, in 2012, had a constituted a panel headed by former deputy RBI governor Usha Thorat to tighten rules for NBFCs which proposed that NBFCs should have minimum assets of Rs.25 crore.
Thorat has also suggested that their minimum equity capital be raised to 10% of risk-weighted assets (bank’s assets weighted according to credit risk), up from 7.5%.