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Journal of Social Welfare and Management

Volume  6, Issue 2, April - June 2014, Pages 57-62
 

Original Article

Recital of Non-Banking Monetary Companies in Synopsis

S. Ganapathy, C. Mayilsamy

*Associate Professor, **Ph.D, Research Scholar, Department of International Business and Commerce, Alagappa University, Karaikudi, Tamilnadu, India.

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Abstract

A robust banking and financial sector is critical to facilitate higher economic growth. Financial intermediaries like Non-Banking Financial Companies (NBFCs) constitute a significant element of the financial system that has penetrated into those areas where banks did not dare by taking both the operational and regulatory risks. Boom-Mushroom-Doom-Zoom, four words in a sequence tell the entire story of performance of NBFCs during the past one and a half decade. To give industry the much needed boost, service tax should be done away with. Special cells within the courts be set up to dispose cases because justice delayed is justice denied The non-banking financial sector is witnessing a consolidation process, with smaller NBFCs (deposit-taking) opting for either merger or closure and some larger ones getting converted into non-deposit- aking NBFCs. NBFCs are comfortably placed with higher capital. The financial performance of deposit- aking Non-Banking Financial Companies (NBFCs-D) showed an improvement as reflected in the increase in their operating profits mainly emanating from growth in fund-based income. Systemically Important-Non- eposit taking NBFCs (NBFCs-ND-SI) segment continued to rely on bank finances for their resource requirement. There is sign of deterioration in the quality of assets in respect of NBFCs-ND-SI. The set of regulations prescribed for NBFCs sector expected to make the NBFCs more resilient in the medium term. The combined balance sheets of financial institutions (FIs) expanded and operating profit as well as net profit have increased significantly. The impaired assets of the FIs showed growth and are a matter of concern. 

Key Words: NBFC; NBFI; NBC. 


Corresponding Author : S. Ganapathy