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Common e-KYC (electronic know your client) for all financial products ( securities, banking, insurance, pensions) will take some more time, according to U K Sinha, Chairman, SEBI.
Speaking at the sidelines of an event organised by the Association of Investment Bankers of India (AIBI), Sinha said “It is a big issue. The issue is not conceptual but procedural. The procedural part will take some more time as regulators are working on it. A group (members drawn from each regulator) is drawing plans. This will take time.”
Sinha observed that the intention of common e-KYC was not to implement something and create disturbance.
He said that consultation was on regarding the issue of foreign portfolio investment of over 10 per cent in listed companies being treated as foreign direct investment.
Citing an RBI report of December 2014, Sinha felt that the top 500 corporates were highly over-leveraged with the net debt/EBITDA at 4.7 times as against the average sustainable level of 3.5 times. He also observed that a capacity utilisation of 71 per cent meant an idle capacity of 29 per cent which was a cause for concern.
One-third cannot generate enough cash internally to service their interest obligation besides the fact that the level of NPAs were worrying.
He said that investment bankers have to look at opportunities in the startup/SME segments besides taking an active role in REITs issuances and municipal bonds given that smart cities were being planned by the Central Government.
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