Finance Minister Nirmala Sitharaman held a review meeting on Thursday with the Financial Stability and Development Council (FSDC) during which she discussed the state of the economy in detail.
“The Council reviewed the current global and domestic macro-economic situation and financial stability and vulnerabilities issues, including... those concerning NBFCs and credit rating agencies,” the government said in a release.
Speaking to reporters after the meeting, RBI Governor Shaktikanta Das said that the government was looking into making specific legislative amendments to address inter-regulatory issues, including to the Multi-State Cooperative Societies Act, 2002.
“The state of the economy was discussed in detail and there were some inter-regulatory issues that were discussed,” Mr. Das said. “We also discussed cybersecurity issues and going forward, from the point of view of the macro requirements, what kind of approach the regulators would take, particularly where there is inter-regulatory overlap.”
“With regard to strengthening the regulatory mechanism, there is a need for certain amendments in the relevant Act that governs the multi-State cooperative societies and there the process of amending certain provisions of the Multi-State Cooperative Societies Act is being taken forward by the government in consultation with the RBI,” Mr. Das added.
‘NBFCs doing well’
The RBI Governor said that the current state of NBFCs was discussed and there were many NBFCs that were performing well.
“Today, both the banks and the markets are differentiating between the good NBFCs and the not-so-good NBFCs,” Mr. Das said. “Even today, we have a good number of NBFCs that are well-functioning, which are able to access funds from the market and loans from the banks, and in fact some of them have got overseas funding also.”
He said that the RBI was monitoring the top 50 NBFCs, which represented roughly 75% of the asset size of the NBFC sector, and held regular interactions with them. However, he did acknowledge that there were some NBFCs that were still in trouble.