SME Times is powered by   
Search News
Just in:   • Mahindra unveils all-new Thar SUV  • 'Need for fiscal stimulus for exports sector'  • ICICI Bank raises Rs 15k cr through QIP of equity shares  • Thai Airways reports $900mn loss for 2020 1st half  • Arunachal CM launches entrepreneurship plan to boost economy 
Last updated: 10 Jul, 2020  

Rupee.9.Thmb.jpg 'RBI should ensure that banks lend to NBFCs'

   Top Stories
» 'Need for fiscal stimulus for exports sector'
» Rupee to remain steady on stimulus hopes
» Responsibilities have grown with faceless approach: FM
» Rs 100L Cr to be spent on 7K infra projects: Modi
» Exports contraction narrowed to (-)10.12 pc in July
SME Times News Bureau | 10 Jul, 2020
Mahesh Thakkar, the Director General of Finance Industry Development Council (FIDC) is of the view that Centre and the RBI should intervene and ensure that well-capitalised banks lend towards the small and medium NBFCs which largely cater to MSMEs and small businesses.

FIDC is the representative body of assets and loan financing non-banking financial companies (FIDC).

Speaking to IANS, Thakkar said that although noting that skepticism towards lending to NBFCs still exists among the banks, it has, somewhat eased in the past few months since the government's liquidity measures and sovereign guarantee schemes.

"Problem is that the banks are sitting with huge funds... and where to lend is the problem," he said.

Talking about the demand-supply mismatch, Thakkar said that there is a gap between "where the money is lying" and "where it is required" and "the Government of India and the RBI and the banks need to see that it is fluid now".

The FIDC DG also mentioned that getting loans from banks for NBFCs also depends on the relationship of the NBFC with the concerned bank and its past record.

Talking on the outlook for the small and medium NBFCs with businesses of around Rs 50-100 crore, he said that growth of these businesses may suffer in the next few months.

He expected that as the sources of funds open up by September-October which would help the sector. As a fallout of the current situation, he said that there may be consolidation in the segment.

On the requirement of change in business strategies by these financial institutions, he said that they may have to rework their strategies, cut costs, bring in technological enhancement, and strengthen corporate governance among others.

Thakkar told IANS that demand is gradually reviving for automobiles, commercial vehicles among others and as various sectors open up including hospitality and other services demand for loans from NBFCs will grow further.

He said that demand should increase to satisfactory levels by the festival season in November. However, full recovery of credit demand from NBFCs would only happen in the next financial year, he said.

On the recent liquidity measures including the Emergency Credit Line Guarantee Scheme (ECLGS), he said that the progress of its implementation would be known in days ahead.

In a recent letter to Finance Minister Nirmala Sitharaman, FIDC had sought inclusion of all loans given to individuals for purchase of commercial vehicles under the ECLGS announced as the 'Aatmanirbhar Bharat' economic package.

FIDC noted that more than 75 per cent of the customers take loans for buying vehicles for commercial purposes in their individual names as they don't have any business establishment in the name of firm or partnerships and they conduct their business in individual names.

Under ECLGS, 100 per cent sovereign guarantee is provided to all lenders to help them give additional funding to MSMEs and other eligible businesses to the total extent of Rs 3 lakh crore.
Print the Page
Add to Favorite
Share this on :

Please comment on this story:
Subject :
(Maximum 1500 characters)  Characters left 1500
Your name:

  Customs Exchange Rates
Currency Import Export
US Dollar
UK Pound
Japanese Yen 58.85 56.85
As on 16 Aug, 2020
  Daily Poll
COVID-19 has directly affected your business
 Can't say
  Commented Stories
» Starting an import export business: Basic guide for beginners(2)
» Importance of technology in Indian agriculture(1)
» One time loan restructuring(1)
» Improve MSME footprint in aspirational districts: Gadkari(1)
» Govt, RBI discussing on allowing co-op banks to lend under ECLGS(1)
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter