Here's why NBFCs will have to look beyond banks for funds
11 months, 3 weeks ago

Here's why NBFCs will have to look beyond banks for funds

Live Mint  

Mumbai: Non-bank lenders that borrow heavily from commercial banks to lend further may need to diversify their funding sources in the year ahead, given the rising competition for bank credit, and higher risk weights on loans to these lenders, experts said. “The idea is to improve funding access to productive sectors, but the regulations can lead to customers paying more and make NBFC loans less affordable," said K.V. Both segments are expected to report steady growth," said Ajit Velonie, senior director, Crisil Ratings Ltd. Velonie said that when it comes to tapping funding avenues other than banks, both debt capital markets and securitisation have already seen a rebound. “We have diversified our lender base between banks, large NBFCs, capital market, and high-quality development financial institutions and impact funds," Nath said.

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History of this topic

NBFCs turn to other avenues as bank credit slows on repeated RBI warnings
1 week, 3 days ago

NBFCs turn to other avenues as bank credit slows on repeated RBI warnings

Live Mint  

India’s non-bank financiers have heeded calls from the Reserve Bank of India to diversify their borrowing profile and are now gradually moving towards more market borrowings and other avenues such as overseas borrowing and securitization or asset sales instead of relying solely upon bank loans. Top NBFCs have seen the share of bank credit in their total debt fall significantly …

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks
1 month, 1 week ago

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks

The Quint  

Given that India’s economic growth relies heavily on domestic consumption, any slowdown in lending could ripple through the broader economy, impacting sectors dependent on consumer spending. Moreover, as banks shift their focus from retail to secured loans to mitigate risks, small and medium enterprises could face reduced access to capital, hindering job creation and slowing down economic expansion. In October, …

NBFCs Outpace Banks With 21% Deposit Growth In FY24
3 months, 1 week ago

NBFCs Outpace Banks With 21% Deposit Growth In FY24

ABP News  

Non-bank lenders have increased their deposit base by 21 per cent in FY24, in contrast to the more modest 13.5 per cent rise experienced by banks, according to data from the Reserve Bank of India. The RBI's Handbook of Statistics on the Indian Economy reveals that the total public deposits held by NBFCs reached Rs 1.03 lakh crore by the …

NBFCs Face Funding Strains, Slower Growth Ahead
4 months ago

NBFCs Face Funding Strains, Slower Growth Ahead

Deccan Chronicle  

Mumbai: Non-banking financial companies are likely to face funding challenges that could result in slower growth compared to the robust expansion seen in the last two fiscals according to rating agency ICRA Ltd. “The banking sector, a key lender to the NBFC segment, is expected to register an overall credit expansion of around 12 per cent in FY2025, resulting in …

Bank lending to NBFCs jump 26% to Rs 15.6 trillion
5 months, 1 week ago

Bank lending to NBFCs jump 26% to Rs 15.6 trillion

New Indian Express  

MUMBAI: Despite the Reserve Bank of India massively hiking the risk capital weighting on banks’ exposure to non-banks last November, the same has been rising unabated clipping at 26 per cent in May 2024, to go past Rs 15.6 trillion. In May 2024, mutual funds debt exposure to NBFCs rose to 13.3 per cent of banks advances to NBFCs, which …

India assessing need for more measures to slow unsecured lending, cenbank chief says
6 months, 2 weeks ago

India assessing need for more measures to slow unsecured lending, cenbank chief says

Hindustan Times  

MUMBAI - India's central bank is assessing whether further measures would be needed to slow down the growth in banks' lending towards unsecured loans and non-banking finance companies, Governor Shaktikanta Das said on Friday. India assessing need for more measures to slow unsecured lending, cenbank chief says The Reserve Bank of India, has warned lenders against "all forms of exuberance" …

NBFC lenders find borrowing a costly affair
8 months, 1 week ago

NBFC lenders find borrowing a costly affair

Live Mint  

MUMBAI : Non-bank lenders are struggling through a spike in borrowing costs as banks have become cautious in lending to them following a regulatory warning, forcing these companies to diversify their money sources. The Reserve Bank of India in November increased the risk weights on NBFCs by 25 percentage points, making their cost of borrowing from banks costlier by 30-50 …

RBI Deputy Governor Criticizes NBFC Demands, Warns P2P Lenders
10 months, 2 weeks ago

RBI Deputy Governor Criticizes NBFC Demands, Warns P2P Lenders

Deccan Chronicle  

The Reserve Bank of India deputy governor M Rajeshwar Rao on Friday criticised the frequent demands from Non-Banking Finance Companies to convert into a bank or their demands to be allowed to accept public deposits.Speaking at the CII NBFC Summit, Rao clarified that the regulations for even entities in the top-most tier of NBFCs are not at par with universal …

More fintech NBFCs tap debt markets for expansion
11 months, 3 weeks ago

More fintech NBFCs tap debt markets for expansion

Live Mint  

MUMBAI : Fintech startups operating as non-banking financial companies are increasingly turning to the bond market to secure funds for expansions due to the rising costs of bank borrowing. JM Financial reported that Fintech NBFCs raised ₹1,818 crore from the bond market in 2023, up from just ₹450 crore in 2022. “With demand for credit picking up, bank credit getting …

RBI deputy governor urges banks to be prudent on lending to NBFCs
11 months, 3 weeks ago

RBI deputy governor urges banks to be prudent on lending to NBFCs

Live Mint  

Mumbai: Banks need to reconsider whether they want to be part of lending consortiums to non-bank financiers that have scores of other lenders – up to 40 at times – to improve their monitoring of borrowers' use of sanctioned loans, RBI deputy governor Swaminathan J said. The deputy RBI governor was responding to a question from SBI managing director Ashwini …

Govt explores steps to boost affordable NBFC loans
1 year, 1 month ago

Govt explores steps to boost affordable NBFC loans

Live Mint  

The Centre is exploring options such as increasing the deposit acceptance limit for eligible non-banking finance companies, introducing deposit insurance and creating a specific liquidity window for NBFCs, according to two officials. The goal is to lower funding costs, enabling NBFCs to offer loans to crucial sectors such as agriculture and micro, small, and medium enterprises, at more affordable interest …

RBI tightens norms for personal loans and credit cards, raises capital requirements
1 year, 1 month ago

RBI tightens norms for personal loans and credit cards, raises capital requirements

Live Mint  

The Reserve Bank of India on Thursday tightened norms for personal loans and credit cards in the form of higher capital requirements. The new norms will make personal loans and credit cards costlier and may curb growth in these categories. The central bank has raised the risk weights for lenders and non-bank financial companies, or the capital that banks need …

NBFCs relying more on bank loans: RBI
1 year, 3 months ago

NBFCs relying more on bank loans: RBI

Live Mint  

Mumbai: Domestic non-banking financial companies, especially those in the upper-layer category, are increasingly relying on bank borrowings as their primary source of funding, according to an analysis in Reserve Bank of India ’s September bulletin. “During the assessment period, NBFCs’ reliance on banks increased steadily due to low interest environment and lag monetary policy transmission," the article said. Direct bank …

Empowering financial landscape: Multibagger NBFC stock sees fresh stake buying amid continuous credit growth
1 year, 3 months ago

Empowering financial landscape: Multibagger NBFC stock sees fresh stake buying amid continuous credit growth

India TV News  

As the Indian economy continues to expand at a faster pace, non-banking financial companies are forming a major part of the financial lending sector. Visagar Financial Services, a leading NBFC, has informed exchanges that promoter group Sagar Portfolio Services has acquired 30 lakh equity shares of the company through an open market transaction. Ahead of the latest open market deal, …

BharatPe And Trillion Loans Join Forces: All You Need To Know About The Latest Acquisition
1 year, 7 months ago

BharatPe And Trillion Loans Join Forces: All You Need To Know About The Latest Acquisition

News 18  

BharatPe Group recently announced that it has completed acquiring a majority stake in Mumbai-based non-banking financial company Trillion Loans. Reportedly, the acquisition is in line with BharatPe’s aim to be a pioneer in ‘addressing credit issues for millions of consumers and businesses in India.’ The fintech firm will provide aid to Trillion Loans so that it can launch new digital …

Money saving mantra: Incentives given by these banks, NBFCs that women must know
1 year, 7 months ago

Money saving mantra: Incentives given by these banks, NBFCs that women must know

Live Mint  

Financial inclusion and gender empowerment have become a top priority for governments and financial institutions worldwide. Similar to this, HDFC offers female borrowers a 5 basis point reduction off of interest rates that range from 8.95% to 9.85% depending on credit score and loan amount. Therefore, many NBFCs offer concessional interest rates to women borrowers who apply for home loans. …

NBFCs’ education loan AUM expected to grow 35-40% in FY23, says Crisil
1 year, 8 months ago

NBFCs’ education loan AUM expected to grow 35-40% in FY23, says Crisil

Live Mint  

New Delhi: Non-banking financial companies' education loan assets under management are likely to grow 35-40% to ₹35,000 crore in the current fiscal, driven by specialized business models and a rise in students studying abroad, according to rating agency Crisil on Thursday. Krishnan Sitaraman, senior director and deputy chief ratings officer at Crisil Ratings, said that swift loan disbursement, adequate risk …

IMF warns of ongoing financial risks following banking turmoil
1 year, 8 months ago

IMF warns of ongoing financial risks following banking turmoil

Live Mint  

The recent banking turmoil in the United States and Europe could spread to crucial non-bank institutions like pension funds, further complicating central banks' fight against high inflation, the International Monetary Fund said Tuesday. Banking risks "could intensify in coming months amid the continued tightening of monetary policy globally," and spread to the interconnected non-bank sector, which now holds almost half …

SEBI alerts RBI about NBFCs evergreening loans
2 years ago

SEBI alerts RBI about NBFCs evergreening loans

Live Mint  

The Securities and Exchange Board of India has informed the Reserve Bank of India about instances of non-bank lenders evergreening loans by using alternative investment funds, two people with direct knowledge of the matter said. “Sebi, during the course of its examination, found at least two NBFCs and two AIFs indulging in the practice of ‘evergreening’ through the AIF route. …

RBI names 16 leading NBFCs in its upper layer list
2 years, 2 months ago

RBI names 16 leading NBFCs in its upper layer list

Live Mint  

The Reserve Bank of India on Friday released a list of 16 upper layer non-banking finance companies that must adhere to enhanced regulation. The 16 companies in the NBFC-UL list are: LIC Housing Finance, Bajaj Finance, Mahindra & Mahindra Financial Services, Shriram Transport, Tata Sons, L&T Finance, Indiabulls Housing Finance, Piramal Capital & Housing Finance, Cholamandalam Investment and Finance Co., …

How MSMEs can procure NBFC loans without mortgaging assets
2 years, 2 months ago

How MSMEs can procure NBFC loans without mortgaging assets

India TV News  

For MSMEs, sustained funding represents the difference between success and failure. Advent of Cash Flow-based Lending However, the advent of cash flow-based lending has made it much easier for MSMEs to procure credit, although at a somewhat higher interest rate to cover the extra risk of lenders. While new-age lenders such as NBFCs and fintech firms were the first to …

RBI may not accept NBFCs’ requests for bad-loan exemptions
2 years, 3 months ago

RBI may not accept NBFCs’ requests for bad-loan exemptions

Live Mint  

India's central bank is unlikely to give "shadow banks" exemptions from stricter bad-loan rules coming into force, sources told Reuters, essentially ending an advantage the non-bank financial firms have had over standard banks. Non-banking financial companies have asked the Reserve Bank of India to exempt smaller loans from the rules taking effect next month that are in line with those …

RBI tightens norms for investments in NBFCs from non-FATF nations
3 years, 10 months ago

RBI tightens norms for investments in NBFCs from non-FATF nations

Live Mint  

The Reserve Bank of India on Friday tightened the rules governing investments in non-bank lenders originating from countries that are not compliant with global standards on prevention of money laundering. “Investments in non-banking financial companies from FATF non-compliant jurisdictions shall not be treated at par with that from the compliant jurisdictions,” RBI said. These rules, RBI said, will apply to …

India’s risk-based internal audit requirement for NBFCs is credit positive: Moody’s
3 years, 10 months ago

India’s risk-based internal audit requirement for NBFCs is credit positive: Moody’s

Live Mint  

The Reserve Bank of India guidelines for non-banking finance companies to implement a risk-based internal audit framework in line with banks is credit positive, Moody's Investors Service said on Monday. "The requirement is credit positive because it adds another layer of risk monitoring and improves the companies' resilience to unexpected shocks," said Moody's in its latest credit outlook. Moody's said …

NBFCs, fintech companies urge FM Nirmala Sitharaman to enhance lending facilities
3 years, 11 months ago

NBFCs, fintech companies urge FM Nirmala Sitharaman to enhance lending facilities

Live Mint  

Non-banking finance companies and fintech players have urged Finance Minister Nirmala Sitharaman to enhance the lending facilities by three to four years which were announced and extended by the Reserve Bank of India during Covid-19 lockdown. This requires great effort for financial inclusion, including increased lending," said Harsh Kumar Bhanwala, Executive Chairman of Capital India. Banks and capital markets play …

Policy roll-back may dent banks’ health, says RBI
3 years, 11 months ago

Policy roll-back may dent banks’ health, says RBI

The Hindu  

In 2020-21, as policy support is rolled back, the impact of the COVID-19 pandemic may dent the health of the banks and non-banks, the Reserve Bank of India said in its Report on Trend and Progress of Banking in India 2019-20. This is a statutory publication in compliance with Section 36 of the Banking Regulation Act, 1949 and this Report …

Non-performing loans in Indian banking sector to rise in next 12-18 months: S&P
4 years, 1 month ago

Non-performing loans in Indian banking sector to rise in next 12-18 months: S&P

The Hindu  

Non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11% of gross loans in the next 12-18 months, S&P Global Ratings said on Tuesday. It said forbearance is “masking” problem assets for Indian banks arising from COVID-19 and the financial institutions will likely have trouble maintaining momentum after the proportion of …

NBFCs have an edge in banking licence race
4 years, 1 month ago

NBFCs have an edge in banking licence race

Live Mint  

Large non-bank lenders stand to gain the most from the Reserve Bank of India panel’s proposal to allow large companies and shadow lenders into banking services, experts said. More importantly, it would allow RBI to increase regulatory oversight over some of the large shadow lenders, particularly after the collapse of Infrastructure Leasing & Financial Services Ltd and Dewan Housing Finance …

NBFCs with Substantial Systemic Risks Must Be Subjected to Higher Degree of Regulation: RBI DG
4 years, 1 month ago

NBFCs with Substantial Systemic Risks Must Be Subjected to Higher Degree of Regulation: RBI DG

News 18  

Asserting the need to recalibrate regulations for shadow banking sector, Reserve Bank Deputy Governor M Rajeshwar Rao on Friday said NBFCs with significant externalities and which contribute substantially to systemic risks must be identified and subjected to a higher degree of regulation. "One can also argue that the design of prudential regulatory framework for such NBFCs can be comparable with …

RBI announces Co-lending scheme for banks, NBFCs for priority sector
4 years, 1 month ago

RBI announces Co-lending scheme for banks, NBFCs for priority sector

Deccan Chronicle  

Mumbai: In a bid to improve the flow of credit to the unserved sector of the economy and to make funds affordable for them, the Reserve Bank of India on Wednesday revised the guidelines for banks and NBFCs including housing finance companies to jointly lend to the priority sector. The primary focus of the revised scheme, rechristened as “Co-Lending Model”, …

KKR to step up real estate financing
4 years, 1 month ago

KKR to step up real estate financing

Live Mint  

Bengaluru: Real estate focused non-banking financial company KKR India Asset Finance Ltd is stepping up lending even as overall financing to the sector remains subdued, said a top executive. We also think that the residential market will continue to bottom out and stage recovery in the next few quarters, thereby presenting a good risk-return proposition for investors,” Yesh Nadkarni, MD, …

Bank Lending to NBFCs Jumps 190 Basis Points to 8.8% Since Sept 2018
4 years, 4 months ago

Bank Lending to NBFCs Jumps 190 Basis Points to 8.8% Since Sept 2018

News 18  

Amid continuing calls for more bank loans to non-banking lenders, the latest data showed that banks have already been lending more to them increasing their overall exposure to NBFCs by 190 basis points to 8.8 per cent between September 2018 and June 2020, according to a report by CARE Rating. In absolute terms, banks' outstanding to NBFCs saw a huge …

Amid churn, non-banks explore consolidation option
4 years, 4 months ago

Amid churn, non-banks explore consolidation option

Live Mint  

India’s non-bank lenders, staring at ₹1.51 trillion debt repayments due in the next six months, are rushing to raise fresh equity and pursuing mergers with bigger peers to avert defaults, as the coronavirus pandemic darkens the outlook for the sector that has struggled since the collapse of Infrastructure Leasing and Financial Services Ltd nearly two years ago. “In many instances, …

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