Money & Banking

Govt expects NBFCs should lend more to fuel economic growth, says Anurag Thakur

K.R. Srivats New Delhi | Updated on October 17, 2019 Published on October 17, 2019

Non Banking Finance Companies (NBFCs) should lend more and ensure further transmission of credit if the economy were to reach a $ 5 trillion level, Anurag Thakur, Minister of State for Finance, said on Friday.

Government expects the NBFCs to lend what they borrow from banks and thereby help in revival of the current cyclical downturn in the economy, Thakur said at the 6th National Summit on NBFCs, organised by Assocham.

“We do get feedback from the ground on what is happening. There is a need for further transmission of credit from the NBFCs on what they borrow from banks, Thakur said. Thakur said that NBFCs play a critical role in the economy and should continue to do so to help India reach the $ 5 trillion mark.

Grahak mela

Referring to the outreach programme, Grahak Mela, rolled out by the Government last month, Thakur said that he found that not many NBFCs were participating in them despite the Government asking both banks and NBFC to do this together. Thakur said that he has advised Finance Secretary to ensure that NBFCs too sit along with the banks in the outreach programme to provide credit to the needy. The first phase of outreach programme had covered 250 districts and nearly Rs 81,000 crore has been disbursed by Public Sector banks during October 1-9.

Open to new ideas

Thakur said that Government was open to “new ideas” to improve the system. “We can consider the new ideas and act on it. There is no ego on this. We can go one step back to move four steps forward”, he said.

Thakur also said that Government had during its recent meetings with both private and public sector banks directed them to make available more funds to NBFCs.

Sunil Kanoria, Past President, Assocham and Vice Chairman, SREI Infrastructure Finance, said that there was need for a Panel to review the definition of Non Performing Assets and look at a definition suitable to the Indian context. He also suggested that there is a need to look at bringing back developmental financial institutions in India.

Ajit Pai, Head of Economics & Finance, NITI Aayog, said there is no systemic liquidity issue in the banking system.

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Published on October 17, 2019
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