1 week ago
Parliamentary Panel Seeks Stronger Oversight of NBFC Loan Recovery
A parliamentary committee examined how NBFCs operate and collect loans.
NBFCs are financial companies that lend money but are not regular banks.
Members were especially worried that bouncers are sometimes used to collect small loans.
They said this could create problems for borrowers.
The committee also discussed fraud and other irregularities.
It wants better systems for people to complain.
It also wants the Reserve Bank of India to monitor large NBFCs more closely.
The committee said action should be taken when companies break regulatory rules.
The Standing Committee on Finance raised concerns about NBFCs using bouncers for loan recovery.
Committee Chairperson Bhartruhari Mahtab said the issue was highlighted during deliberations on NBFC operations.
The panel sought the government’s views on addressing gaps, irregularities and fraud in the sector.
Mahtab said NBFC-related investment had risen from about 10% to 26% of deposits and finance over 15 years.
The committee called for stronger grievance systems, regular RBI intervention and action against regulatory lapses.
- Who
- The Standing Committee on Finance, chaired by Bhartruhari Mahtab, and the Reserve Bank of India as the sector regulator.
- What
- The panel examined gaps in NBFC operations, including the use of bouncers for loan recovery, irregularities and fraud.
- Where
- New Delhi.
- When
- The concerns were discussed at the committee’s meeting; the article does not specify the date.
- Why
- The panel said NBFC investment and interconnectedness have increased, requiring stronger regulation, grievance mechanisms and monitoring.
Key facts
- Institution reviewed
- Non-Banking Financial Companies (NBFCs)
- Main concern
- Use of bouncers for recovering small loans
- Committee
- Standing Committee on Finance
- Committee chairperson
- Bhartruhari Mahtab
- Reported increase
- NBFC-related investment rose from about 10% to 26% of deposits and finance over roughly 15 years
- Requested oversight
- Regular regulatory monitoring, grievance mechanisms and intervention by the Reserve Bank of India
- Additional concern
- Irregularities, fraud and regulatory lapses, including at larger NBFCs
Quotes
Bhartruhari Mahtab
Chairperson of the Standing Committee on Finance
“"It was discussed, especially large number of money is of small lending where the bouncers are being used and that is the main cause of concern which has been expressed by Honourable Members."”
republicworld.com
“"Today we had deliberation on NBFC and there has been some concerns related to the gaps that exist and we wanted the government's view on the steps they are taking."”
republicworld.com
Sources
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