New Delhi [India]: Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday it will do its best after being given the additional responsibility of supervising and regulating non-banking financial companies (NBFCs) in a bid to boost investment and lending in the economy.
Talking to media after Finance Minister Nirmala Sitharaman customary post-budget meeting with the RBI's central board of directors, he said the government's decision was taken after a lot of deliberations. "The RBI will do its best to deal with this additional responsibility," he said.
In the Union Budget for 2019-20, it has been proposed to improve NBFCs' access to funding by providing a limited backstop for the purchase of their assets. The government will provide a partial guarantee to state banks for the acquisition of up to Rs 100 crore of highly-rated assets from NBFCs.
The RBI has also been made regulator of housing finance firms, replacing the National Housing Bank. Das said lowering the fiscal deficit target to 3.3 per cent of the GDP is good for macro-economics of the country.
The Budget FY 20 proposes that public sector banks will be provided with a capital infusion of Rs 70,000 crore, giving a much-needed boost to the stressed banks who are under pressure owing to the rising non-performing assets.
"This is a very positive development," said Das. "It will not only enable banks to take care of their capital needs to comply with regulatory requirements but will also help them to step up their lending disbursements. It augurs well for the banking sector."
Das said the RBI will ensure that benefits of interest rate cuts are passed on to consumers. He said there will no immediate impact of hike in excise duty and cess on fuel products like petrol and diesel.
Issues related overall economy and fiscal policy decisions taken by the government were taken up at Sitharaman's first post-Budget meeting with the RBI's central board of directors.