NBFCs expect 25 bps CRR cut by RBI in May

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Non-banking finance companies (NBFCs) are expecting a cut of 25 basis points in Cash Reserve Ratio (CRR) by Reserve Bank of India (RBI) in its monetary policy review on May 3, but, to the disappointment of many, they don't expect any further cut in the repo rate which has already been lowered by 50 bps so far this year.

The chiefs of leading NBFCs met RBI on Tuesday as part of the customary pre-policy round of meetings. "We discussed monetary issues, funding and liquidity problems," Mahesh Thakkar, director general, Finance Industry Development Council.

FIDC official also raised the concern over recommendations of Usha Thorat committee report which called for stricter provisioning and capital norms for NBFCs. "We talked of the report, particularly provisioning norms and CRAR (capital adequacy ratio) and if our demands can be met on that. That is a separate issue but we do not want it to come up suddenly and we get taken aback," said Thakkar.

Usha Throat's report had recommended that asset classification norms of NBFCs should be brought at par with banks to 90 days instead of 180 days currently.

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Story first published: Wednesday, April 10, 2013, 13:30 [IST]
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