New NBFC loans for real estate developers may be Rs 1.7 trillion

Experts warn that the levels of non-performing assets (NPAs) could inch up further in the current quarter.

Non-banking financial companies (NBFCs) with large, but relatively low-vintage, loans to real estate developers are the most vulnerable to rising risks for asset quality in the sector, said analysts. According to some estimates, such loans stood at Rs 1.7 trillion at the end of September 2018-19 (FY19).

Several NBFCs might not be prepared for the stress, as a large part of their exposure to real estate developers has only come in recent years.

“(A majority) of the real estate builder (CRE) funding in last four years (65 per cent incremental) have been driven by NBFCs and housing finance companies (HFCs), which were