Business News/ Industry / Banking/  RBI guv Shaktikanta Das to meet NBFC, MSME execs next week

Mumbai: Reserve Bank governor Shaktikanta Das Wednesday said he will be meeting the representatives of non-banking finance companies (NBFCs) and small businesses next week.

Das had already met the heads of state-run banks in two installments and private sector bankers last month.

The move comes a day after the central bank allowed recast of loans of up to 25 crore for micro, small and medium businesses (MSMES). NBFCs were reportedly peeved at Das’ predecessor Urjit Patel for not granting an audience to explain problems.

“Will hold meetings with MSME associations and representatives of NBFCs next week," Das wrote on the micro- blogging website Twitter.

Das had hinted towards a more conciliatory approach, taking the views of all the key stakeholders on board, hours after assuming charge following the surprise resignation of Patel and had already met the heads of state-run lenders and followed it up with private sector ones.

In the run-up to Patel’s resignation last month, the support to MSMEs and the liquidity starved NBFCs was one of the biggest points of friction between government and the Reserve Bank.

While the poll-bound Modi government wants to increase credit supply through liberal policies to crucial sectors such as MSMEs, the banking regulator was taking a conservative view and trying to avoid precedents.

The RBI had on Tuesday announced the forbearance, months after declaring an end to any sort of loan recasts.

Analysts have called the move as regressive which will hurt credit culture.

On NBFCs, the RBI under Patel had made it clear that it was willing to play its part as the lender of last resort but the time was not up to do so.

The central bank had attributed the issues at NBFCs to asset liability mismatches, pointing out to reliance on short-term liabilities to fund long-term assets which had come to haunt in a rising interest scenario where rolling over debt became difficult.

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Updated: 02 Jan 2019, 06:48 PM IST
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