NBFC operating model key to reducing risks

A comprehensive and pragmatic view of the risk and finance functions is necessary

For the past month or so, concerns are being raised on liquidity challenges and the possible asset liability mismatches (ALM) in the non-banking financial companies (NBFC) space. Many of the top NBFCs have lost their sheen on the stock market and may face challenges in raising/renewal of funds, given 41 per cent of the borrowings of NBFCs are maturing in the next six months.
 
NBFCs have had phenomenal asset growth (average annual growth rate of 22 per cent) for the last few years. The size of the NBFC sector in India was about Rs 27.5 trillion in 2017 in