INSUBCONTINENT EXCLUSIVE:
MUMBAI: The lurking fear that non-banking finance companies (NBFCs) and housing finance firms could run into trouble continues to linger,
despite shadow banks averting a default in November.
On Thursday, capital markets regulator Sebi met the top four credit ratings agencies to
discuss their assessment of liquidity of NBFCs that have borrowed fiercely in the past few years, the possible repercussions if these
NBFCs are cooperating in sharing information
But a lot of it is short-term money, which would come up for redemption some months down the line
The stress could resurface in February or March, if the situation does not improve
NBFCs at the November 19 meeting, it was perceived that RBI wants NBFCs to slow down, even shrink.
Total outstanding bank loans to NBFCs
grew 43 per cent between September 2017 and September 2018, as against 5 per cent between September 2016 and September 2017
more headroom for lending to NBFCs
However, most banks, particularly private and foreign lenders, prefer buying loan portfolios by cherry-picking NBFC assets, rather than
directly lending to finance companies.
