Besides, registration with the Bank confers a legitimacy to the NBFC as a regulated entity and gives a sense of comfort to the lenders to the NBFCs. It is therefore necessary to begin by harmonising this level across the sector. An easy to follow roadmap for compliance by March 2017 has been provided so that NBFCs have the required time for planning capital augmentation.
However, in so doing, central banks expect positive spill-over effects to other segments not so targeted. A good illustration of this lies in Japanese CP markets. We see improvements, as expected and hoped for, in the A2-rated CP market even though they are not eligible for the BOJ’s purchase program. The A2-rated CP market is apparently affected by our purchase of A1-rated CP.