Letter to BS: Avoiding AQRs will only result in problems at a later stage

The last thing the public would like to know is growing stressed asset portfolios of NBFCs and HFCs

This refers to “DHFL assigned default ratings, MFs bleed” (June 6). I would like to reiterate the need for an asset quality review (AQR) of non-banking finance companies (NBFCs) and housing finance companies (HFCs), both from the point of view of financial stability and stakeholder awareness. The former chief economic adviser Arvind Subramanian had also spoken about the need for AQR of NBFCs. Banks, mutual funds, pension funds, NBFCs and HFCs are closely connected. The credit exposure of NBFCs and HFCs to low rated borrowers or group entities often ends in default that impacts the other entities mentioned. 

Keeping in mind