Non-banking financial firms happy with Pranab’s budget

February 26th, 2010 - 6:08 pm ICT by IANS  

Pranab Mukherjee Kolkata, Feb 26 (IANS) The Non-Banking Financial Corporations (NBFCs) Friday welcomed Union Finance Minister Pranab Mukherjee’s budget proposal to provide banking licenses to private sector players, saying it was a positive move.
“…There is a need to extend the geographic coverage of banks and improve access to banking services. In this context, I am happy to inform… that the RBI (Reserve Bank of India) is considering giving some additional banking licenses to private sector players,” Mukherjee said.

“Non-banking financial companies could also be considered, if they meet the RBI’s eligibility criteria,” Mukherjee said in his budget speech.

Hemant Kanoria, managing director of Srei Infrastructure Finance, said his company was eagerly waiting for the RBI to come out with the guidelines.

“We expect the RBI to come out with the guidelines within the next three to six months for non-banking finance companies wanting to set up banks. We will have to wait to see the details of the guidelines,” Kanoria told IANS.

“Srei Infrastructure Finance may consider applying for a banking licence if we found ourselves eligible,” he said.

A senior official of Peerless General Finance and Investment Company (PGFIC) described the proposal as positive.

“The proposal by the finance ministry to include NBFCs into the banking system is a positive move,” Jayanta Roy, director, financial products distribution of PGFIC, told IANS.

Peerless is a residuary non-banking company.

“The finance minister’s proposal regarding the RRBS (regional rural banks) would help in greater financial inclusion,” Roy said.

Mukherjee said: “Regional Rural Banks (RRBs) play an important role in providing credit to rural economy. The capital of these banks is shared by the central government, sponsor banks and state governments. The banks were last capitalised in 2006-07. I propose to provide further capital to strengthen the RRBs so that they have adequate capital base to support increased lending to the rural economy.”

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