In the immediate aftermath of the IL&FS crisis, there was a liquidity challenge in terms of raising capital for the non-bank finance companies (NBFCs). The government felt that the regulations have to be tweaked in a way for funds to be channelised into the NBFC sector, said Subhash Garg, economic affairs secretary. \u201cNon-bank finance companies should work to develop an instrument to channelise household savings into the sector,\u201d Garg said at an event organised by the Confederation of Indian Industry (CII). Foreign Portfolio Investors (FPIs) turned positive on the sector and pumped in $352 million in November 2018, following sell-outs in September and October, according to data by the NSDL, giving a hint of improvement in investor faith. Garg said there was a large pool of domestic and foreign funds waiting to invest in NBFCs. Garg said that when the IL&FS issue came to light, the government wanted to look at the overall data on the sector, but it was not available with anybody, so the government, along with the Reserve Bank of India (RBI), is now working to develop a source of data through strengthening of institutional mechanism. There is a gap in the way the NBFCs are regulated, there needs to be some easing of regulations, which allows more investments by domestic and international investors. Also read|\u00a0Govt hunts for GST defaulters as compliance rate continues to decline Uday Kotak, MD and CEO of Kotak Mahindra Bank, said at the same event that regulators and NBFCs need to closely track the signals coming from the providers of risk capital about the NBFCs they are investing in. \u201cDo not wait disproportionately long to get the best price: raise the capital when the sun is shining,\u201d advised Kotak to stressed NBFCs. Ajay Srinivasan, chief executive of Aditya Birla Capital, said the NBFC sector\u2019s short-term funding issue is resolved but mid- and long-term funding still remains an issue. The sector needs increased exposure to debt through a hike in corporate bond investment limits, added Srinivasan. The NSDL data shows that as of January 3, the limit for FPI investments in corporate bonds is `2.89 lakh crore. The utilised level is 71.14%.