mumbai the reserve bank of india rbi has indicated that its new norms on nonbanking finance companies nbfcs have been developed under pressure from association of regulators worldwide and part of a concerted global move to reign in shadow banking activities the regulator however clarified that small nbfcs that fail to receive a registration can continue to be in business and avail bank finance this is part of an international agenda and all responsible countries have to abide said anand sinha deputy governor rbi said on monday while addressing nbfc representatives in a meeting organized by the finance industry development council at the indian merchants chamber here stating that rbi has to align with what is happening internationally sinha said that after the global financial crisis of 2008 the focus has been on institutions that engage in shadow banking financial entities that conduct banking like functions but do not have a banking licence banks are being subject to very restrictive regulations if regulations for banks are tightened risks will flow to lightly regulated entities said sinha representatives of the finance industry however said that the move by rbi to increase capital requirement and tighten bad loan norms for finance companies would force several companies out of business if it is the intention of the rbi to remove regulatory arbitrage then it should remove the arbitrage on both sides of the balance sheet said t t srinivasaraghavan md sundaram finance according to srinivasaraghavan finance companies have to hold higher capital than banks even if the assets held by them are of identical quality also banks get tax breaks on bad loans which finance companies do not he said