Calcutta, March 22 :     The Reserve Bank of India has provided a shot in the arm to non-banking finance companies (NBFCs) by directing banks to provide discounting facilities to NBFCs for bills raised against the sale of automobiles. Normally, automobile companies approach NBFCs to seek loans against their bills because they rarely receive the full payment against vehicle sales. The bills thus act as a guarantee of sorts. However, NBFCs had been complaining that they were so cash-strapped that they could no longer discount bills provided by automobile companies. They had been demanding that banks be allowed to extend the amount to them, which they could then pass on to these auto companies. A senior RBI official said NBFCs play an important role in meeting the financial needs of the transport sector, particularly the commercial vehicles segment, including trucks, cars, three-wheelers and other light commercial vehicles. ?However, the ability of the NBFCs to meet these requirements is constrained because of non-availability of discounting facilities from banks. They can only fulfil the financial needs if the banks provide a support system,? the official said. He pointed out that NBFCs play a major role in financing the automobile sector, by discounting the bills which are drawn by the seller?the automobile firm?to the buyer. The seller of the vehicle approaches NBFCs to discount their bills and get back a certain amount of the money before the buyer fully repays him. Bill discounting is a deduction from a bill of exchange when it is purchased before its maturity date. The party that discounts the bill pays less than its face value and therefore makes a profit when it matures. The normal maturity period is either 90 or 180 days. According to the new regulation, banks have been directed to rediscount these bills so that the liquidity position of NBFCs improve and they can tide over the present financial crunch. However, bankers are afraid to provide discounting facilities to NBFCs. ?The banks are unable to recover car loans. We have to be cautious while entering this segment,? said a senior banker. ?A lot of money of the banking sector will be locked in NBFCs if we enter into this business. NBFCs are now having a tough time. They are defaulting on fixed deposit payments. It will be very difficult to realise these funds. This is a risky venture,? the banker said. He added that the RBI, on one hand, is saying that the banks will get autonomy in credit decision, and on the other, is directing them to provide credit to certain risky areas. Moreover, the automobile industry is also in the dumps. Except the two-wheeler segment, all the others are on the downhill. ?With rising non-performing assets, we have to think several times before we invest in this sector,? bankers said.