KOCHI: Mahesh Thakkar, Director General, Finance Industry Development Council, Mumbai, has urged the Reserve Bank of India to follow the example of IRDA, SEBI and TRAI for representing the cause of non-banking finance companies in India.

Addressing a seminar organised by the Kerala Non-Banking Finance Companies Welfare Association here on Saturday, he said the regulating body should assist the development of the sector.

Stressing the importance of the NBFC sector, he claimed that 70 to 80 per cent of the commercial vehicles are financed by the NBFCs. The commercial vehicle financing was estimated at Rs.15,000 crores, according to him.

He demanded that road transport finance be treated at par with housing finance.

The NBFCs should be given benefits similar to those extended to the housing finance companies.

A new refinance corporation for road transport financing should be created on the lines of the national housing bank. Liberal bank funding at competitive rates should be made available to NBFCs.

In this connection, he demanded that the Shastri Committee report should be implemented.

He said the RBI should impress upon commercial banks and the Indian Banks Association on issues such as bank funding to NBFCs. The regulators in telecom, insurance and stock market were the developers of the respective sectors. Such a pattern should be followed in the case of NBFCs also, he said. He also recalled that strong measures adopted by the RBI had helped in eliminating weak and fly by nigh operators from the NBFC fold.

Earlier, George Alexander Muthoot, chairman of the Kerala Non-Banking Finance Companies Welfare Association, said foreign banks were trying to associate with NBFCs. He resented dual control over NBFCs.

The NBFCs were registered with the RBI and there was no need to have a licence from the State Government separately, according to him.

He pointed out that several financial institutions belonging to other States were functioning in Kerala without any licence from the State Government.

Despite the constraints, the prospects of NBFCs were brighter now, he said.

Kurian C. George, vice-chairman of the association, said the RBI had acknowledged the role of NBFCs in Indian economy and called for appropriate measures to improve their strength.

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