With customers’ fund requirements increasing, NBFCs seek government’s permission to function

While the government has exempted most of the financial institutions from shutting down their offices despite the lockdown, NBFCs are the only part of the finance sector that have been left out. With the fund requirements for customers increasing during the lockdown, the FIDC (Finance Industry Development Council), a representative body of NBFCs has written a letter to the government seeking permission to operate partially.

Since many of the customers’ fund requirements cannot be fulfilled by banks along with limited resources and manpower, the letter also requested permission for its members to be operational across the country. “It is necessary that essential staff may be required to be physically present in the branch offices and they cannot work from home for the collections and depositing cash in banks,” said Mahesh Thakkar, director general of FIDC.

With several jobs and companies either closed down permanently or halted, the financial requirements have been rising. Therefore, the letter also requested for at least 30 percent of NBFCs staff to be allowed to operate across the country so that they can cater to the people especially those belonging to lower and middle income class during this challenging time.

On March, the RBI had announced a moratorium period of three months on all loans outstanding as on March 1 under its ‘Covid-19 Regulatory Package’. However, as per the reports, over one crore retail borrowers of NBFCs haven’t been gaining benefits from the three-month moratorium. Hence, FIDC also requested in the letter for a three month moratorium on loans given to NBFCs by lenders that also include banks. Several credit agencies and industry bodies have been recommending relief measures for NBFCs to curb the impact of economic fall-out due caused by the pandemic outbreak.