L&T said it expects changes from the RBI, including bank finance being classified under priority sector lending and easy access to other fund raising instruments like external borrowings
Mumbai: Larsen and Toubro (L&T) Financial Services has called for changes in requirements governing the non-bank lending segment and asked the sector regulator not to give step-motherly treatment to it, reports PTI.
"I think they (non banking financial companies-NBFCs) have played an extremely important role. However, the regulator perhaps considers them as a step-child. I think there are very serious issues when it comes to regulation," L&T Financial Services Chairman and Managing Director YM Deosthalee said at an event over the weekend.
He gave out a list of changes which the sector expects from the Reserve Bank of India (RBI), including bank finance being classified under priority sector lending and easy access to other fund raising instruments like external borrowings.
"I don't know why achieving PSL targets through NBFCs is a problem? Ultimately reach is important," he said, stressing that the NBFCs are playing an important role in distribution.
There are many issues which a NBFC faces on the liability side, he said and asked for steps like liberalising the external commercial borrowings (ECB) window in order to reduce NBFCs' dependence on bank lending.
The ex-chief financial officer of engineering and construction major L&T also sought to dispel notions on safety of the sector, stating, "The NBFC model is safer because they have larger capital adequacy. Their net worth is higher. From depositor perspective, they are safe."
"Regulation should be pro-development of a sector, rather than killing the sector," he said.
With over 12,000 NBFCs, the role of the regulator does tend to get difficult, but Deosthalee stressed on the need to look at well established large NBFCs in a different way, without going into specifics.
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