It is a good thing that the RBI has finally decided it wants to regulate NBFCs (‘Reserve Bank wants to regulate NBFC holding companies’, April 1). NBFCs perform a very important role in financing sectors/areas where traditional banks do not focus. So, when the RBI decided to clamp down on various NBFCs over the years, this hurt credit availability in a very big way.
Now that the RBI plans to regulate NBFCs, hopefully, it will allow them to grow. But while regulating NBFCs, the RBI has to understand that the rules that apply to them are very different from those which apply to commercial banks. If the regulations get stifling, this will have the same impact as clamping down on the NBFCs.
Sailesh Shah, Mumbai