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New Delhi, April 11 Recommendations urging the Centre and the Reserve Bank of India to provide an urgent bank-backed credit lifeline to the country's Non-Banking Financial Companies (NBFCs) in the name of Covid-19 relief package are unfounded, industry insiders and sector experts said on Friday.Recently, various reports from credit agencies and industry bodies have recommended relief measures for NBFCs to mitigate the economic fallout of the Covid-19 outbreak. However, experts have raised concerns on the demand for huge relief for the shadow-banking sector as many among them have been under the lens over the past few years over regulatory and compliance issues, with the IL&FS crisis being a watershed moment for the Indian NBFC sector.Speaking to , Abheek Barua, Chief Economist at HDFC Bank said that currently, all the sectors which have genuine needs should be looked into and provided with relief, and merely sticking to NBFCs would not be beneficial for the economy."There are all sorts of claims on the government's resources which are limited. Now its no longer about NBFCs, there are the MFIs (micro-finance institutions), then there are actual sectors like civil aviation, hospitality, part of the MSME sector which of course is funded partly by the NBFCs," he said.Barua added that there have been much more claimants on the RBI's and the government's resources, be it fiscal or monetary."NBFCs deserve some kind of a support but they have also been some kind of a problem for the past year and a half and now we have other segments to also consider. MFIs for instance I think they are very actively involved in reaching credit to the very poor who are likely to be affected the most by the coronavirus," he said.He said that currently, it is much more than just about the NBFCs and the resources are limited, so the government will have to think about how much to give them and how much to others who have a very genuine need for financial resources be it from a fiscal source or from monetary sources.There are also differing voices regarding the matter. N. R. Bhanumurthy, Professor of National Institute of Public Finance and Policy said that this is not the government to look into the regulatory issues much and NBFCs also require support as other segments, more so as they were already going through a liquidity crisis.Further, with some credit rating agencies suggesting for the moratorium on loans provided by the RBI to be extended to the non-banking financial companies (NBFCs) several industry insiders and economists have said that their suggestions have to be considered with greater scrutiny as the track record of several rating agencies have been under the cloud in several fiascos including the IL&FS crisis."Rating agencies globally have been under the cloud for long because of their dubious behaviour and should be taken with a pinch of salt," said an industry veteran.( With inputs from IANS )

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