Finalyst November 2013 Issue November 2013 | Page 20

FINALYST

NOVEMBER 2013

-tion of tractors and trucks. At the
same time, half of the credit requirement in manufacturing industries is
fulfilled by NBFCs. Also, a major portion of private construction funding
depends on NBFCs. This is a clear indication on how NBFCs can play a
vital role in driving the Indian economy.
Conversion of leading NBFCs into
banks might affect the funding in these segments. Hence, these NBFCs
choosing not to convert themselves
into banks can help these segments
to improve their position in the economy.

pends on the regulations by RBI for all segments of our economy can
obtaining banking licence. Depending benefit out of it.
on the regulations, these NBFCs

This is one way of looking at it. However, in certain cases, conversion into

might or might not look to convert
themselves into banks

banks might be necessary to enhance
the growth in several segments and
for RBI to have control over the operations of these financial institutions.

Hence, looking into the future, RBI
should consider the best interests of
various parties before laying out the
guidelines for banking licence so that

The future role of NBFCs largely de-

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