Covid-19 woes: NBFC sector staring at another bout of liquidity challenge

Most banks are yet to decide on giving moratorium to shadow lenders

The cash-strapped non-banking financial company (NBFC) sector is bracing for another challenge.
 

In the absence of clarity on whether the three-month moratorium applies to the loans NBFCs have taken, the shadow lenders have to repay banks at a time when their cash flows have taken a hard knock due to the coronavirus pandemic.
 

Banks are offering fresh credit at rates above 8 per cent depending on the tenor, while borrowing funds from the RBI at 4.4 per cent. NBFCs and HFCs have to give a three-month moratorium to their consumers on term loans, as suggested by the RBI last month.