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The Reserve Bank will soon come out with comprehensive guidelines to protect consumers from being cheated by entities.
“The Financial Sector Legislative Reforms Commission report recommends adoption of the consumer protection framework that will empower and require regulators to ensure consumer protection for the financial activities regulated by them,” said RBI executive director N S Vishwanathan, on the sidelines of an event organised by Assocham in New Delhi on Friday.
“The bank (RBI) is in the process of framing comprehensive consumer protection regulations based on domestic experience and global best practices,” he said, adding, the existing norms would be strengthened. All the RBI regulated entities would come under this, be it banks or non-banking financial companies (NBFC), he said.
Asked if RBI was considering setting up a fund for consumer protection, he said, “At present there are no such plans...we only have a Depositor Education and Awareness Fund.”
On aligning the fund-raising requirement with the new Companies Act, Vishwanathan said, in June 2013, RBI issued a circular that private placement norms applicable to non-NBFCs would be applicable to NBFC as well.
According to the existing norms, NBFCs cannot raise funds through private placement from more than 49 people at a time, he said.
“Subsequently, the Companies Act changed the rules with regard to private placement. You can raise money through private placement only from 200 persons in a year,” he said.
“If you want anything beyond that you have to undertake public issue. So, we have to align our guidelines with the new Companies Act,” he added.
Without giving timeline, he said, it is work in progress.
It is being considered.
On small and payment banks, he said "We have issued final guidelines on licensing for which we have called for applications."
"NBFCs are allowed to convert, subject to meeting the norms. We have also stated that over time we would open this licensing window on tap, thus the possibility of NBFCs including the MFIs in the sector becoming small banks is there," he added.
