Recently the Reserve Bank of India the central Banking authority in India came out with a set of guidelines to regulate NBFCs in the country. The NBFC term stands for Non Banking Finance companies and includes Hire Purchase and Leasing companies. These companies are engaged in financing of Trucks,Taxis,Busses,Cars,White goods, Two wheelers ,Industrial equipments and several other productive assets and consumer goods. 

This industry is one of the oldest in the country and several big and small companies have been in the business  for generations. The main source of funds for these companies is Deposits from Public,Bank and Bank borrowings. 

These companies have been under the regulations of RBI since 1977.  Since last year after the failure of one of the companies in the industry  there has been an unusual attention on the industry.The regulatory requirement  has even assumed political significance in view of the large number of middle class investors having a stake in the industry as Depositors,Share Holders and Debenture Holders. 

It is the opinion of one section of industry observers that the industry has contributed significantly to the Savings Mobilization in the country and Credit Delivery to Rural Retail consumer markets besides being  a critical player in Truck Financing and Car financing sectors.It is also the opinion of this segment that the current regulations are impractical , unwarranted and aimed at closing down a huge segment of the industry consisting of a large number of players scattered all over the country. 

It is surmised that the regulations were politically motivated to favour a section of the industry including some international players.The issue involves survival of an industry which has existed much before our independence and all the dependent industries and business.It therefore requires a debate in depth before an action like the one proposed is contemplated. 

The author has for long been warning the industry of such whimsical regulations being introduced by the regulatory authorities and also been advocating remedial measures which have gone unheeded. 

Two of the articles written by the author in the last six months period are available on the site. As early as an year back  he had also proposed a discussion on Insurance for NBFC deposits .Instead of the issues being discussed at length RBI has now proposed regulations which could mean the death of the industry. 

It is intended that if the visitors to the site have any views they can send their feedback.If any queries are there on any of the issues involved an attempt would be made to answer them. a more detailed note on Insurance which was submitted earlier by the author to RBI, and The Ministry Of Finance would also be posted on the site for your comments shortly. 

Na.Vijayashankar