The finance ministry is considering extending the scope of the Securitisation and Reconstruction of Financial Assets Bill, 2002 to registered non-banking finance companies (NBFCs).
Finance minister Jaswant Singh is said to have given this assurance to a delegation of officials representing NBFCs and the Reserve Bank of India that met him last week.
While the Securitisation Bill enacted last year provides for financial institutions (including NBFCs) to use the provisions of the Act and recover their non-performing assets (NPAs), thus far it has been applicable only to banks and FIs. Bringing the finance companies under its ambit will require a formal notification from the ministry.
The main reason why finance companies have not been allowed to take advantage of the Act is an apprehension in the minds of the authorities that it could be misused.
