RBI constitutes working committee to address NBFC regulatory issues

The Reserve Bank of India (RBI) has constituted a working committee to address a range of emerging issues regarding regulation of the NBFC (non-banking financial companies) sector.

The group would be headed by Usha Thorat, former deputy governor of RBI and currently the director, Centre for Advanced Financial Research and Learning (CAFRAL), according to an RBI release issued today.

The group would focus on the definition and classification of NBFCs, addressing regulatory gaps as also regulatory arbitrage, maintaining standards of governance in the sector and appropriate approach to NBFC supervision.

The scope of examination would however, be within the current legislative framework, according to the release.

According to the RBI, the NBFC sector in the country has undergone a significant transformation over the past few years and has emerged as a systemically important element of the financial system. The regulatory imperatives regarding the non-banking financial sector had also become a matter of concern during the recent global financial crisis.

The group also includes as members Sanjay Labroo, director, Central Board, Reserve Bank of India, Rajiv Lall, managing director and chief executive officer, Infrastructure Development Finance Corporation, Bharat Doshi, executive director and group chief financial officer, Mahindra & Mahindra and Pratip Kar, director, Globsyn Business School, Kolkata.

The member-secretary of the group would be Uma Subramaniam, chief general manager-in-charge, department of non-banking supervision.