RBI Act will be amended to regulate NBFCs: Sinha

PATNA, Nov 21: Union finance minister Yashwant Sinha said on Saturday that the Reserve Bank of India (RBI) Act will be amended soon to regul...

PATNA, Nov 21: Union finance minister Yashwant Sinha said on Saturday that the Reserve Bank of India (RBI) Act will be amended soon to regulate the non-banking financial companies (NBFCs).

Expressing concern over the fraudulent activities of some of the NBFCs in the country, Sinha said he has received a report of the committee headed by the secretary of the banking department of the finance ministry on the activities of NBFCs. "We are now discussing with RBI and will soon amend the act to regulate the NBFCs’ services. The amendment will take into account all the transactions, deposit norms and dealings and investments made by NBFCs so that they cannot fleece investors," Sinha told The Indian Express.

Sinha was of the opinion that not all NBFCs are bad. "In fact some of them have even helped the economy of the nation. In particular car loans have been made easily available by them," he said.

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Blaming the previous government for framing the wrong policy on NBFCs, Sinha said most of the fraudulentcompanies took advantage of it. The RBI Act on NBFCs was amended in February this year to regulate the companies and this only served to harass good companies. "With the new amendment we will ensure that the role of the NBFCs turn positive towards the development of the economy," Sinha said.

When asked about the forthcoming (December 11) dharna of LIC and GIC employees near Parliament House, Sinha replied: "Why should they be afraid of competition. For the development of the economy competition is a must and monopoly must end for the benefit of the public.

We are only asking domestic private firms to enter the sector. We are not opening the gates to foreign companies."The union finance minister said the price rise is a transient phenomenon.