India Inc has made a case to allow large non-banking financial companies (NBFCs) to offer full banking facilities.

The newly elected CII president Sanjiv Bajaj told The Telegraph that large and strong NBFCs needed to be given “more teeth”, so they offer not only last-mile banking but also the other services of banks.

He said regulator RBI must prescribe adequate amounts of risk mitigation measures.

The RBI must also open up lines of financing to NBFCs as it did during the pandemic “Provide that as an additional show of confidence — allow NBFCs to get into many other lines of business where currently, banks are allowed. Again, put the necessary guarantees in place for that.”

Bajaj said the licence to NBFCs should be seen as a learning licence towards banking. “Finally, in this digital world, I believe that RBI must work on a discussion paper on what is good for the future of banking.”

On inflation, he pitched for the lowering of taxes on petrol and diesel as they were increased by the government when the price of crude oil was low in the global market.

“One of our prime constituents of inflation is oil. We’ve seen the rise on the ground of oil prices resulting in higher petrol prices. We’ve seen the impact on inflation and this needs to be urgently addressed.”

“We know taxation, both at the Centre and states, is very high and it is something which we have seen when oil prices fell, at that time rates were increased. Now that oil prices have gone up, we believe that there is a case for this to be discussed ...in a collaborative manner, because eventually we are doing this for one country.” Bajaj said.

The Centre on Saturday has reduced the excise duty on petrol by Rs 6 per litre and diesel by Rs 8. Some states have followed suit on Sunday.

“Food prices are also playing spoilsport. We are looking forward to a good monsoon, which means food prices should start moderating pretty soon,” he added.

Asked about the LIC initial public offer which got clobbered on listing, he said “one should look at it from a longer term perspective. In the short term, there could be ups and downs. If one looks at the BSE index over a longer term, it has given more than 16 per cent CAGR returns”.

Bajaj, who would be heading to the World Economic Forum meeting in Davos, said “the country could emerge as a manufacturing hub of the world and the government’s PLI schemes are attractive to woo investments”.

“Globally corporate are looking for multiple sourcing places, and India is ideally placed with large demographic advantage and a huge market. That’s one big message India Inc would be conveying as it connects with corporate leaders at Davos,” he added.

The World Economic Forum (WEF) will hold its annual meeting in the Swiss ski resort town of Davos from May 22.