Budget 2025 | NBFC Body Meets FM, Seeks 3 Big Sops For The Sector

The Finance Industry Development Council, a body representing NBFCs, has asked the government to set up a dedicated fund for the refinancing of non-banking finance companies in Budget 2025. Director Raman Aggarwal said after a meeting with Finance Minister Nirmala Sitharaman, “Large NBFCs are now borrowing largely from overseas, and many small and mid-sized NBFCs, who are dependent on bank borrowing, are now borrowing from large NBFCs, which is increasing their cost of borrowing,” adding that, “there is a very strong case here for direct refinance window provided to NBFCs.” The meeting was part of the series of customary pre-budget consultations that the Finance Minister holds with sector experts, economists, and industry bodies before the Budget. On the tax front, Aggarwal suggested the government exempt the tax deducted at source on a non-individual's borrowing from an NBFC. “It is becoming an operational nightmare, there is no benefit to the government, there is no benefit to the borrower or to the lender. It is causing an operational nightmare and NBFCs are the only class of financial institutions who are not exempted,” Aggarwal said.