Headwinds ahead for NBFCs; analysts differ significantly in recommendations

But analysts differ significantly with respect to individual large players

In August, the Reserve Bank of India Governor Shaktikanta Das held a meeting with chief executive officers/ managing directors (CEOs/MDs) of large non-banking financial corporations (NBFCs). The discussions included diversifying borrowing sources for NBFCs and housing finance companies (HFCs) to contain increasing reliance on bank borrowing, risks associated with high credit growth in retail segment in unsecured loans, prioritising IT upgrades and cyber-security, improving provisioning, monitoring of stressed exposures and slippages, ensuring robust liquidity and asset-liability management, ensuring transparency in pricing, creating robust grievance redress mechanisms.

Given that acceleration of GDP growth requires a rebound in consumption, NBFCs are critical