NBFC slowdown due to low demand and lack of market funding, says RBI

The cash crunch among robust NBFCs is mainly due to a financial support from market instruments, rather than from the lenders.

The slowdown in the non-banking financial companies (NBFCs) is mainly due to lower demand in the economy and non-availability of market funding, a recent analysis of the post-Infrastructure Leasing & Financial Services (IL&FS) crisis conducted by the Reserve Bank of India (RBI) showed.
 
An internal analysis, done by the RBI’s department of supervision, showed that the non-availability of funds among NBFCs from market and banks is not across the board and the “market is differentiating between good and not-so-good entities”.
 
The NBFCs are under stress primarily due to two reasons: crisis in the real estate sector and the