De-registration of small NBFCs will hurt financial inclusion: Finmin
The ministry is also of the view that if the RBI, in its final guidelines, directs these small NBFCs to de-register till they attain the threshold of R25 crore asset size, the regulator should also issue appropriate notifications, allowing these small NBFCs to continue their existing business, such as auto financing, official sources told FE.
The ministry is also against deregulation or de-recognition of NBFCs as it will not only curtail the operations of the NBFCs, but also harm the financial inclusion programme. “If they (the RBI) have limitations regarding supervising the total 12,300-odd NBFCs (of which around 9,000 are with an asset size of less than R25 crore), they may exempt these small NBFCs from registration. However, the RBI should direct them to submit elaborate reports regularly and conduct random checks of their operations,” an official said.
Simultaneously, the RBI should work on a stronger supervisory mechanism for the sector and put in place an elaborate system for capturing and analysing data from all the NBFCs, the sources said. The RBI should also look at bringing out size-wise uniform accounting norms and financials reporting rules for different categories of NBFCs, they added.
The ministry is holding a meeting on Monday — on the issues arising out of
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