The Reserve Bank of India (RBI) on Friday cancelled the certificate of registrations of 31 Non-Banking Financial Companies (NBFCs). The RBI cancelled the registration in the exercise of powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934.
Recently, the RBI eased liquidity norms for banks in order to release additional funding for NBFCs.
NBFCs have been under pressure recently due to fears of a liquidity crisis, high valuations and asset-liability mismatches.
On October 19, the central bank increased lenders' single borrower exposure limit for NBFCs which do not finance infrastructure, from 10 to 15 per cent of capital funds.
The exposure limit will remain effective up to December 31, 2018.
Meanwhile, the government on Friday said it is not seeking Rs 3.6 lakh crore capital from the Reserve Bank but is only in discussion for fixing appropriate economic capital framework of the central bank.
"Lot of misinformed speculation is going around in media. Government's fiscal math is completely on track. There is no proposal to ask RBI to transfer Rs 3.6 or 1 lakh crore, as speculated," Economic Affairs Secretary Subhash Chandra Garg tweeted. He said the only proposal "under discussion is to fix appropriate economic capital framework of RBI." Exuding confidence about government's fiscal math, he said, it will stick to the fiscal deficit target of 3.3 per cent for the current financial year ending March 31, 2019.
"Government's FD (fiscal deficit) in FY 2013-14 was 5.1%. From 2014-15 onwards, Government has succeeded in bringing it down substantially. We will end the FY 2018-19 with FD of 3.3%. The government has actually foregone 70,000 crore of budgeted market borrowing this year," he said.