Covid-19 resurgence may derail recovery in Indian NBFC sector: Agencies

Face renewed asset quality, liquidity risks amid second wave; challenges likely to increase if recent curbs to contain pandemic are prolonged

Rating agencies Icra, Fitch and its domestic affiliate India Ratings (Ind-Ra), said today that the recent spike in Covid-19 cases and associated lockdowns, though localised, could adversely impact non-banking companies (NBFCs). It could also act as a dampener for the securitisation market, affecting fund-raising for NBFCs in the near term and may delay recovery in the sector.

India's non-bank financial institutions (NBFI) face renewed asset quality and liquidity risks amid a second wave of coronavirus infections. This may postpone the recovery in the sector, according to Fitch Ratings.

The challenges are likely to increase if recent restrictions to contain the