NBFCs

The Supreme Court on Tuesday refused to hear the petition seeking directions to the Centre to enact law for the conduct of Micro finance institutions

The finance minister has promised a Budget like “never before” but issues at hand, especially the health of MSMEs, are so critical and government resources so constrained that such a wide promise may be difficult to fulfil.

The RBI proposes tighter rules for NBFCs and wants them classified into four categories. This is crucial for fiscal steadiness and to bring back confidence and will ensure that larger players will be screened just like banks.

Ignoring the advice of experts, the RBI’s Internal Working Group has recommended the entry of business houses into the banking sector. This can have dangerous repercussions for depositors and shareholders.