Amid intense lobbying by finance companies, the government has stepped in to water down the harsh, new rules prescribed by a Reserve Bank of India panel. A group, constituted by the finance ministry, has suggested that since non-banking finance companies play a significant role in asset creation and reach out to borrowers that high-street banks can't deal with, they should be given adequate time to raise capital and fulfil stricter provisioning standards. While the RBI panel, headed by former deputy governor Usha Thorat, has given its recommendations for quite some months now, the regulator is yet to come out with the guidelines. Meanwhile, the key advisory group formed by the government and comprising senior bureaucrats, industry representatives, professionals and even central bank officials, has finalised a parallel set of recommendations which were submitted to the ministry less than a fortnight ago.
Source: Economic Times
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