NBFCs face tough times, struggle with funds as banks turn risk-averse

The ratings downgrade of Reliance Capital has put the spotlight back on private non-banking financial company (NBFC) sector, which seemed to have just started recovering from a liquidity crisis triggered by the IL&FS defaults last year.
 
The stocks of large NBFCs have fallen in the last one year substantially, even as funding cost shot up. NBFCs, which accounted for nearly 70 per cent of the corporate debt market in India, seem to be struggling in tapping the market now.
 
This would mean that NBFCs, even if they survive the hit, would have to scale down their growth plans,