Banks and NBFCs are expected to hear about few issues in the Union Budget. How does the proposed IFRS synchronize with the current taxation laws as both are at extreme variants? Some clarity or way forward is expected.

Banks expect some clarity on the stimulus package. Banks are at times compelled to bail out the troubled companies for eg. Case of Satyam. However in certain sectors eg. In Real Estate,  the expectation is that that clarification may come on the re-structuring of the loan /credit facilities to Developers where there is a delay or default on the part of the Developer/Borrower.  Any restructuring on the Real Estate space has a huge impact on the common investor as the indulgence given to the Developers increase their holding power, creating steep rise in the Real Estate prices.

NBFCs have been used as an alternate to Banks particularly on the lending transactions as NBFCs may have far more flexibility in their approach and governance.  Some clarity is expected on the role and size of the NBFCs.

NBFCs are important in the Indian scenarios, however these should be able to serve at local jurisdictions and should not be

permitted to become very large and if NBFCs become large the regulations as applicable to Bank should be made available for governance and efficient management and also to check abuse.

Recovery laws need to be made more tighter and SARFESI having stood the test of time needs to be made more stronger and the processes are expected to be further streamlined. The need for Central Registry has been re-emphasized many times which Government is expected to address.

In addition to the existing insurance products there is a need to introduce a product in the nation of `Title Insurance’.  This will facilitate transactions in Real Estate sector.  Title insurance needs to be considered as a product.

Mr. Rajesh Gupta, Managing Partner, S. N. Gupta & Co.