Insta
SC Garg, Economic Affairs secretary (Photo by Pradeep Gaur/Mint via Getty Images)
Economic Affairs secretary SC Garg has blamed lack of real-time data for the ongoing crisis in the shadow banking sector. He was speaking at a CII summit on Saturday (5 January), reports Live Mint.
Calling for proper regulations to keep the banking sector in order, he said the government was working with the RBI to create a system for information about the NBFC (Non-banking financial company) sector.
The liquidity crisis in the NBFC major, IL&FS (Infrastructure Leasing & Financial Services) last August, has put the entire financial sector in a crisis. Primarily relating to liquidity, many are calling it a crisis of confidence rather than anything fundamental.
The IL&FS defaults led to other major NBFCs like DHFL and Indiabulls witnessing a massive fall in their stocks.
“The IL&FS crisis shows that there are lots of gaps not only in terms of regulations but also in data collection, information, interaction with the government or the regulators. Today, we don’t even know who to talk to in the NBFCs and there are no organisations that represent them,” Garg said.
He called for proper regulations for development of NBFCs, however, deriding any regulation that chokes growth. Garg added that the regulations must serve not only the needs of NBFCs and investors but also borrowers , thus leading to overall financial stability.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.
Latest