Finance Industry Development Council (FIDC) CEO Raman Aggarwal has said that there is a need to create a dedicated refinance window for non-banking financial companies (NBFCs) to ensure a smooth and sustainable flow of funds and resources raised through this mechanism may be exclusively used to finance MSMEs and priority sectors.  

With regard to recovery, he said there was a suggestion for tweaking of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act so that NBFCs can benefit from this. He said currently the limit under SARFAESI Act is Rs 20 lakh which can be reduced so that smaller NBFC players can be covered under this debt recovery laws. He said FIDC made a case of bringing down the limit from present Rs 20 lakh to Rs 1 lakh so that smaller NBFCs can be benefited from this.

Aggarwal also said that the government can consider removing TDS on non-individual borrowers as there is no extra revenue generated from this provision. He said there was also a recommendation for notification for NBFCs for deduction in taxable income under section 80E on interest on Education loans.