Member of parliament, Narendra Jadhav on Wednesday objected to Beijing's investments in the non-banking financial companies (NBFC), pointing that the Chinese companies picking up stake in Indian firms such as Paytm poses a national security risk.

In November last year, Paytm had picked up a stake in Mumbai-based CreditMate, which provides services to various banking and financial services companies as well as NBFCs.

"If Alibaba is allowed to dominate the NBFC sector, it could lead to predatory pricing," Jadhav said.

Alibaba is reportedly offering financial aid through its tie-ups with Aditya Birla Group's NBFC arm, IDFC Bank and Kotak Mahindra Bank.

India needs to restrict the foreign participation in the NBFC sector as well, Jadhav said, adding that the investment restrictions on private banks should also be applicable to the Indian NBFCs.

Jadhav said he has raised the issue of foreign participation in the NBFC sector in the parliamentary panel of finance and gave a calling attention notice in Rajya Sabha on the same.

The private and financial data of Indians can be with the foreign companies, especially with the Chinese companies, and a level playing field between the private companies and the NBFCs with respect to the foreign ownership is required, he added.

This article will be updated when we receive comment from Paytm.

First Published:Jul 25, 2018 1:44 PM IST