Letter to BS: More power to RBI to regulate housing finance is welcome

The NBFCs must make arrangements to improve the liquidity position to prevent further defaults

This refers to “RBI may get regulatory powers over HFCs” (July 3). At a time when the financial intermediaries, particularly the non-banking financial companies (NBFCs), have defaulted in honouring its financial commitments, the move to bestow more regulatory powers to the RBI to regulate housing finance companies is welcome. The audited financial statements and the ratings assigned by the rating agencies proved untrustworthy. Investors lost a lot due to the beaten down values of the shares of many NBFCs. Lending to NBFCs by banks, especially by the state-owned ones are more likely to slip into non-performing assets (NPA).

The NBFCs must