homefinance NewsWhy allow mergers when there is need for banks, NBFCs in system, says Tata Investment
Why allow mergers when there is need for banks, NBFCs in system, says Tata Investment
Mergers of non-banking financial companies and banks are difficult as each follows the different regulatory framework, said Amit Dalal, ED of Tata Investment Corporation.
Mergers of non-banking financial companies and banks are difficult as each follows the different regulatory framework, said Amit Dalal, ED of Tata Investment Corporation.
“To merge these both entities is trying to transfer the risk of different types to each other and I am not sure the regular perhaps envisage this happening when they formed norms for NBFCs and banks and I think that there is a need for both in the system. So why should you allow the mergers of such companies to take place?” he added.
Talking further about the merger, Dalal said, “My general feeling is that if you want to convert your NBFC into a bank or if you want to transfer that whole activity into banking sphere, it’s very easy to do through a merger. It’s difficult if you had to convert your entity and become a bank because the norms are so much difficult. So I would wait for RBI’s assessment.”
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