The housing finance companies (HFC) will with most probability come under the regulatory jurisdiction of the Reserve Bank of India, reported Business Standard, citing sources.
The sources, however, added that though the regulatory powers may be shifted to the central bank from the National Housing Board, the latter will continue to supervise the firms.
The move comes at a time when most of the country’s 82 HFCs are experiencing a slowdown while some of them are facing a liquidity crunch.
However, this may not be the only big change that the government is considering. The centre, the report said, is planning tweak and make amends to the Banking Regulation (BR) Act which would give more powers to the RBI. The apex bank, the report said, may also be given powers that will enable it to change the management and boards of non-banking financial companies (NBFCs) like with the case of private banks.
The new changes are likely to be announced by finance minister Nirmala Sitharaman in the upcoming Budget.
RBI has added that India’s financial system remained stable against the backdrop of improving resilience of the banking sector, even though the emerging trends in global economic as also geopolitical environment create a problem.
It’s over a decade after the global financial crisis, financial vulnerabilities continue to build although the financial system resilience has increased. Domestic financial markets saw some disruption coming from the non-bank space and growing importance in the financial system, said the report.
At the same time, the Reserve Bank of India has cancelled the certificate of registration of 23 non-banking financial companies (NBFCs).
According to the apex bank, the registrations were cancelled between May 10 and June 11.
The move has impacted companies such as Prudent Fintrade, Deluxe Vyapaar and Intimate Finance and Investment, among others.
