The Reserve Bank of India is likely to come out with a set of guidelines that are going to make it easier for banks and non-banking financial institutions (NBFCs) to repossess vehicles from borrowers who default on their loans.
The decision to declare the norms comes with a view to stimulate the ailing auto sector. However the outline of the guidelines will be discussed in a meeting that will occur towards the end of this week. The Finance Ministry has called the meeting that will be attended by representatives of RBI, the banking industry and the automobile sector.
Industry sources claim that, "This will be the second such meeting," and added that at this time it is necessary to come out with such norms in order to give confidence to the banks and NBFCs to finance the vehicles.
Earlier on January 30th, a meeting had already been held to discuss this issue. Representatives from the Finance Industry Development Council (FIDC), Indian Banks Association (IBA), Society of Indian Automobile Manufacturers (SIAM) and private banks were present in the meeting.
FIDC Co-Chairman Raman Aggarwal said that there is an immediate need to chalk out guidelines and a regulatory system on vehicle repossession of loan defaulters. "RBI has taken both conventional and unconventional measures to provide enough liquidity in the system... There are some structural reasons (for interest rates not easing immediately)... Over a period of time the rates will come down," he added.
Further he said that the banking regulator would continue to take conventional and unconventional steps that would ensure sufficient funds in the system.
The auto sales in January dropped by 7.45% as compared to the same period, a year ago. However the sales has picked up in comparison to the last few months. Sales between October and December last year fell by around 14% to 18%.
Society of Indian Automobile Manufacturers (SIAM) DG, Dilip Chenoy said, "January sales reflect a certain degree of optimism in the two stimulus packages announced by the government over the last two months. Whether this optimism is sustained in February and March depends on these multiple measures continuing plus the RBI measures spelt-out recently, and the interim budget to be presented next week,"
Source: http://www.rupeetimes.com/news/car_loans/rbi_to_announce_guidelines_on_vehicle_repossession_2131.html
The decision to declare the norms comes with a view to stimulate the ailing auto sector. However the outline of the guidelines will be discussed in a meeting that will occur towards the end of this week. The Finance Ministry has called the meeting that will be attended by representatives of RBI, the banking industry and the automobile sector.
Industry sources claim that, "This will be the second such meeting," and added that at this time it is necessary to come out with such norms in order to give confidence to the banks and NBFCs to finance the vehicles.
Earlier on January 30th, a meeting had already been held to discuss this issue. Representatives from the Finance Industry Development Council (FIDC), Indian Banks Association (IBA), Society of Indian Automobile Manufacturers (SIAM) and private banks were present in the meeting.
FIDC Co-Chairman Raman Aggarwal said that there is an immediate need to chalk out guidelines and a regulatory system on vehicle repossession of loan defaulters. "RBI has taken both conventional and unconventional measures to provide enough liquidity in the system... There are some structural reasons (for interest rates not easing immediately)... Over a period of time the rates will come down," he added.
Further he said that the banking regulator would continue to take conventional and unconventional steps that would ensure sufficient funds in the system.
The auto sales in January dropped by 7.45% as compared to the same period, a year ago. However the sales has picked up in comparison to the last few months. Sales between October and December last year fell by around 14% to 18%.
Society of Indian Automobile Manufacturers (SIAM) DG, Dilip Chenoy said, "January sales reflect a certain degree of optimism in the two stimulus packages announced by the government over the last two months. Whether this optimism is sustained in February and March depends on these multiple measures continuing plus the RBI measures spelt-out recently, and the interim budget to be presented next week,"
Source: http://www.rupeetimes.com/news/car_loans/rbi_to_announce_guidelines_on_vehicle_repossession_2131.html
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