Relaxing lending norms by RBI will benefit SEBI in long run, says SK Mohanty

Besides its headquarters in Mumbai, SEBI has regional offices at New Delhi, Chennai, Kolkata and Ahmedabad.
Image for representational purpose only (File | Reuters)
Image for representational purpose only (File | Reuters)

VIJAYAWADA: At a time when much hue and cry was raised over the Centre’s reported move to issue directions to the Reserve Bank of India (RBI) on lending norms, full-time member of Securities and Exchange Board of India (SEBI) SK Mohanty has said that if the Central bank relaxes lending norms, the securities regulatory body will be benefitted in the long run. 

Speaking to reporters on the sidelines of the inauguration of SEBI branch office in Vijayawada on Saturday, he explained that the loans received will be used by business houses to generate profits, which could in turn be invested in securities.  

His statement comes in the context of the Centre planning to invoke Section 7 of the RBI Act which empowers it to issue certain directions to the RBI. Under the Act, the government can issue directions on the matters of public interest such as relaxing lending norms to small and medium-term-enterprises and extending a helping hand to weak banks and non-banking financial companies. 

Mohanty said that activities of the office include spreading financial literacy in the region by conducting educational programmes and seminars, grievance redressal measures and approaching prospective investors and educating them on investment options. As many as 30 resource persons have been appointed. 

“The financial scenario in Andhra Pradesh is good. The GDP is 11 per cent and the economy is robust. We have been taking up financial literacy seminars and educational programmes even before establishing this branch. We have an optimistic outlook about our future in the State,” Mohanty explained. He further said the State constituted 91 lakh of the 33 crore Jan Dhan accounts in the country. “That is another indicator of financial soundness. We are going to leverage the economic strength of the State and will also prepare for the future by conducting awareness programmes in schools and colleges from where we will get prospective future investors,” he said. 

The new branch is the 17th local office. There are already 45 listed companies, 9,000 share trading terminals, 52 asset management companies and 11 lakh beneficial account holders from the State.  
Besides its headquarters in Mumbai, SEBI has regional offices at New Delhi, Chennai, Kolkata and Ahmedabad.

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