Union Budget 2019 India: NBFCs on Thursday recommended Finance Minister Nirmala Sitharaman to treat the space as a priority sector and also ensure a dedicated liquidity window. The cash-starved NBFC sector, in the pre-budget consultation with the finance minister, also said that it’s unfortunate that based on a few recent defaults, a dismal picture has been painted for the entire NBFC sector, ET Now reported. it’s not a solvency issue which is causing problem to the NBFC space, but rather an asset-liability mismatch, they also said. There is a need that Mudra scheme refinances the big NBFCs for lending to small and medium NBFCs as well.
In the June monetary policy meeting, the RBI had said that there is a need for new rules for the NBFC sector so as to improve their fiscal health. “It is our endeavour to have an optimal level of regulation and supervision so that the NBFC sector is financially resilient and robust,” he said. The central bank also talked about taking corrective measures to address the issues plaguing the shadow banking sector in the country. The stakeholders of the sector also recommended to the finance minister that the recoveries must be fast tracked.
Finance Minister Nirmala Sitharaman has already concluded two pre-budget meetings with stakeholders groups from the financial and capital sector ahead of the Budget on July 5.
In the meeting Nirmala Sitharaman also discussed ways to improve the financial health of state-owned banks, their bad loans assets position and improvement in lending to priority sectors such as micro, small and medium enterprises (MSMEs) and agriculture, ET Now also reported.