Asset quality of NBFCs worsens in H1 amid Covid-19 pandemic: RBI report

The asset quality of non-banking financial companies (NBFCs) deteriorated in April-September 2021 (H1FY22) owing to the second wave of the pandemic.

Their gross non-performing assets (NPAs) rose to 6.8 per cent in September 2021 from 6 per cent in March 2021.

The Reserve Bank of India’s (RBI’s) annual Trend and Progress report (FY21) said the sector might have to grapple with higher delinquencies as and when policy measures unwound.

The pandemic posed significant challenges to NBFCs during the first wave (2020) also. Aided by policy initiatives, they emerged stronger, with reasonable balance sheet growth, increased credit intermediation, higher capital, and a lower delinquency