2019-08-11_Business_Today

THE BUZZ

HFCs

MORE

POWER

TO RBI

THE RESERVE Bank of India (RBI)

seems to be among the most over-

worked institutions. From regulating

banks and new age small payments

banks to fintech entities and NBFCs,

besides deciding the monetary policy,

the RBI clearly has its hands full. To

add to this, the Budget has proposed

a unified regulatory body for both

NBFCs and housing finance compa-

nies (HFCs) under the aegis of RBI. Till

now, HFCs were being regulated by

the National Housing Bank. The gov-

ernment believes this would improve

regulation of HFCs and bring in a more

transparent system.

Since various financial institutions

perform inter-related functions, it

seems logical to bring in HFCs under

the purview of RBI. Moreover, HFCs

are similar to NBFCs, the only differ-

ence being their focus on housing

finance. However, as the NBFC crisis

has shown, regulation has little role

to play if the liquidity dries up, which

has already led some entities to fall by

the wayside. A separate department

within the RBI could have regulated

the sector more effectively, ensuring

growth and financial stability.

As things stand, the RBI does not

seem to have the necessary where-

withal to closely monitor diverse

entities in the financial sector. It needs

more resources to handle the expand-

ing responsibilities. Above all, it must

re-invent itself as a more agile and

pro-active authority rather than being

a regulator that steps in only when a

crisis erupts. – Rashmi Pratap

LEADING online market for B2B platform IndiaMart,

which saw a successful listing the BSE, proved to be

the best test case for venture capitalist exits. Existing

investors, including VCs like Intel Capital, Ama-

deus Capital Partners and Quona Capital, looked at

an exit through the successful listing making it the

second online firm to tap into an IPO, after Infibeam.

Reports suggest that e-commerce big boy Flipkart,

owned by Walmart, could tap the US IPO market by

2022, which would provide an exit to investors. Many

VC investors are now considering India’s successful

start-ups mature for an exit. – Rukmini Rao

WRITE-OFF

WORRIES

THE COUNTRY’S larg-

est bank, the State Bank

of India (SBI), has writ-

ten off `1.54 lakh crore

of bad assets in the last

four years. While the

size of the written off

amount is not big when

compared to the `36.

lakh crore balance

sheet size of the bank,

the amount is equal to

the balance sheet of

mid-sized Federal Bank

or Bank of Maharash-

tra. In 2018/19 alone,

the write-off of `61,

crore is almost 40 per

cent of the last four

years’ total. SBI has pro-

vided for these loans,

but that raises ques-

tions about its recovery

efforts.

• Anand Adhikari

SBI

VCs Look to Exit Start-ups

INDIAMART

`9,

CRORE

Total issue size of

the about half a

dozen IPOs likely

to come out in

August, though

many may pull out

16 IBUSINESS TODAYIAugust 11I 2019