While NBFC (Non-Banking Financial Company) is in limelight for its downfall all over the news, Dr Amitabh Rajan, Chairman, Reserve Bank of India Services Board, says that there is still hope and the NBFCs in India are doing well.
“The NBFC sector is facing a lot of criticism recently, but as per the report published in Global Monitor of Entrepreneurship, India has stood fifth amongst other 56 nations on entrepreneur contributions all over the world. The innovativeness of Indian entrepreneurs has also being appreciated stating that they are doing well. This means the sector is doing well and there are still hopes,” he said.
Today newspapers and other media firms are picking up some reports online and start condemning NBFC sector in the same way as shadow banking system being criticised in the United States. There is no need to praise or condemn NBFC. The point of the function is to understand taking a view of financial history and not to get panicked.
We have to see the entrepreneur history of India, the diversified total ethical contribution has been made by this sector.
Citing the example of United States financial turbulence in 2007, Dr Rajan said that, “A new term was coined in 2007 by the economist Paul Mackel, Shadow Banking system, which meant a banking system that doesn’t follow any regulations. It was condemned badly. While the said system created a bad situation in the United States a similar activity in China flourished in 2008.”
The United States, EU (European Union) has learned the hard way but India has been conscious, the impact of the 2008 global financial trouble didn’t affect India. There was no dent in the Indian financial system. It was primarily because we believed it in regulations ultimately.