Work of NBFCs termed transparent

RBI guidelines being followed: Thomas George Muthoot

May 28, 2014 11:36 am | Updated May 23, 2016 06:54 pm IST - KOCHI

Non-Banking Finance Companies (NBFCs) are working as per the rules and regulations of the Reserve Bank of India (RBI) and their dealings are transparent, Thomas George Muthoot, chairman, Association of Kerala Non-Banking Finance Companies, said here on Tuesday.

He was speaking to The Hindu in the wake of the ongoing ‘Operation Kuberan.

NBFCs played a very important role in the financial inclusion programme of the Government of India. Customers could make use of the services of the grievance redress forum set up by the NBFCs. A fair practices code, prescribed by the RBI, was being followed. The code may be viewed on the websites of the companies, he said.

Referring to comments on interest rates, he said the RBI had given the freedom to the boards of NBFCs to fix the rates, considering the cost of funds and margin and risk premium. The business being market driven, there was no scope for charging high rates, especially as the NBFCs were functioning in a very competitive space, Mr. Muthoot said.

NBFCs had certificates of registration obtained from the RBI and registered NBFCs do not accept blank cheques, stamp papers, signed white papers, and title deeds. RBI norms on Know Your Customer and corporate governance were being strictly adhered to. The apex bank’s guidelines on transferring 20 per cent of the net profit to the reserve fund were being complied with. Rules regarding ceiling on public deposits, deposit rates, and credit to risk weighted asset ratio, were also being followed, he said.

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