Li­cence to Clean

Business Today - - THE BUZZ - – Anand Ad­hikariz

THE NON BANK­ING Fi­nance Com­pa­nies sec­tor with over 11,000 play­ers of all shapes and sizes is show­ing re­duced num­bers. This is good news. In the first half of the cur­rent year, there were some 368 can­cel­la­tions, while in 2016/17 there were 169 off­set by 105 new reg­is­tra­tions.

The RBI says the can­cel­la­tions are mainly vol­un­tary sur­ren­der, and non-com­pli­ance of the re­vised cri­te­ria for net owned funds. Af­ter the Pay­ments, and Small Fi­nance banks (mostly MFIs), there are many NBFC play­ers not re­new­ing li­cences, and there are fin­techs with NBFC li­cences where en­try and exit are rapid.

The NBFC as a sec­tor is just 14 per cent of the bank­ing in­dus­try’s to­tal as­sets and its share in loan and ad­vances is about 18 per cent. Clearly, the in­dus­try needs fewer but not smaller play­ers.

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