- The government has decided to give the regulation of the NBFCs to the RBI by announcing it in the budget 2019
- For strengthening the regulatory authority of RBI over NBFCs, appropriate proposals are being placed in the Finance Bill
- According to the Finance Bill, the RBI can supersede the NBFC Board for a maximum five year period, if the RBI finds that it in the ‘public interest’ or to prevent the affairs of an NBFC whose conducts are detrimental to the interest of the depositors or creditors
Other announcements of Budget 2019:
- For purchase of high-rated pooled assets of financially sound NBFCs, of not more than ₹1 lakh crore, the government will provide one-time six months’ partial credit guarantee to PSUs for first loss of up to 10%
- FIIs and FPIs will be allowed to invest in debt securities by shadow banks, which help NBFCs to raise more funds
- Provided some tax incentives to the NBFCs by treating them on par with banks in relation to Debenture Redemption Reserve (DRR)
Question:
Q.1 As announced in the budget 2019, RBI will supersede the regulation of which board following the provisions of the finance bill?a. Bank Board Bureau
b. Non-Banking Financial companies Board
c. Financial Investment Board
d. Foreign Investment Board
