HomeBankBudget 2023: "Govt Should Encourage Banks to Increase Funding for NBFCs," says Parry Singh of Red Fo...

Budget 2023: “Govt Should Encourage Banks to Increase Funding for NBFCs,” says Parry Singh of Red Fort Capital

Reader's Pick

As the Union Finance Minister Nirmala Sitharaman, is all set to present the Indian Budget for 2023-24, we reached out to Parry Singh, Founder, and CEO, of Red Fort Capital to understand what the NBFC sector is expecting from the upcoming budget.

In his comments about the Union Budget 2023-24, Parry Singh, Founder & CEO, of Red Fort Capital said, “Non-Banking Financial companies (NBFCs) play a pivotal role in facilitating faster economic growth. Therefore, the government should make bold moves to encourage banks to increase the quantum of funding for NBFCs. In the 2023 budget, we anticipate a strong mandate for lending NBFCs working to empower underserved small and medium businesses through financial and technological interventions.”

“We anticipate some relaxed tax regulations and liquidity assistance for NBFCs. Thus, NBFC taxation must be brought up to par with that of banks. Over time, the RBI has tightened the NBFC regulatory framework, particularly for large and deposit-taking NBFCs, and brought it more in line with bank regulations. However, tax laws have not kept up, and as a result, NBFCs face higher tax costs or compliance burdens than banks in several areas,” he said.

Parry Singh, Founder, and CEO, of Red Fort Capital

“NBFCs anticipate a more accommodating compliance framework to provide credit to unbanked and underbanked MSMEs and small business owners and bring them into the official lending system,” Singh added.

- Advertisement -

Continuing with his expectations, Parry Singh added, “Non-banking financial companies (NBFCs) have long complained that restrictions similar to those imposed on full-fledged banks are reducing the benefits of NBFC status. The industry anticipates that the government will put pressure on the RBI to relax industry regulations. However, there are other factors at play as well.”

“The industry is hoping that the government will standardize taxation and recovery policies. It anticipates tax relief by exempting NBFCs from paying tax on source-deducted income from securitization. A more flexible and cost-effective financing source for NBFCs is also urgently required,” Singh said.

“It makes sense to treat NBFCs similarly to banks in some areas to maintain Non-Banking Financial Companies as a crucial layer in formal finance. We look forward to enhancing Recovery Policies, Leverage and ease limits, as well as simplifying compliance and taxation similar to banks,” Singh further added.

Subscribe to our Newsletters

We don’t spam! Read our privacy policy for more info.

- Advertisement -

Read latest Business News and Startup news on TechGraph. Watch live and latest news on TechGraph TV. Follow us on Facebook or follow us on Twitter and Instagram. Listen audio news from TechGraph Briefings on Spotify, Google Podcast, Amazon Music & on Apple Podcast.

Krishna Mali
Krishna Mali
Founder & Editor of TechGraph.

Latest News

Promoted Links

Related Stories

Paytm Payouts transfers Rs 1,500 crores

India-based e-wallet company, PayTM said, "Its Paytm Payouts has transferred ov...

Japan approves 26 trillion yen as economic stimulus package to combat overseas risks

Japan's cabinet approved an economic stimulus package worth 26 trillion yen ($2...

Sino-US trade war offers Europe’s chance to bank more Chinese reserves: Analysis

Should European countries want the euro to replace the dollar as the world's do...

Samsung Electronics asks its shareholders to use electronic voting for upcoming AGM

Technology giant Samsung Electronics has adopted electronic voting for the firs...

Rahul Gandhi hits on RCEP says, ‘Make in India’ has become ‘Buy from China’

Asserting that "Make in India" has become "Buy from China," Congress leader Rah...

Employees union seeks FIR against Jet Airways boss Naresh Goyal, Vinay Dube and on SBI Chairman

The employee union of Jet Airways, which is facing its worst crisis, Friday sou...

Rajesh Bysani joins Brainly as its new CPO

A New York headquarter peer-to-peer learning platform, Brainly has announced th...

Turno snaps $13.8 Mn from B Capital & Quona Capital

Turno, an India-based commercial electric vehicle (EV) distributor, and financi...

Startup investment through convertible notes has waned: Shivam Bajaj, CEO of Avener Capital

Speaking to the TechGraph editorial team, Shivam Bajaj Founder & CEO of Ave...

“This is Not A Bailout” Minister Karin Keller-Sutter on UBS Credit Suisse Takeover

Speaking about the merger of UBS and Credit Suisse, Switzerland Finance Ministe...