Stressed assets of non-banking financial companies (NBFCs) are likely to touch ₹1.5-1.8 lakh crore, or 6-7.5% of their assets under management (AUM) by the end of this fiscal, says a report.
However, the one-time COVID-19 restructuring window, and the micro, small and medium enterprises’ (MSME) restructuring scheme of the Reserve Bank of India (RBI) will limit the reported gross non-performing assets (GNPA), Crisil Ratings said.
“This fiscal has brought unprecedented challenges to the fore for NBFCs. Collection efficiencies, after deteriorating sharply, have now improved, but are still not at pre-pandemic levels.
Increase in overdues
“There is a marked increase in overdues across certain segments and players,” the agency’s senior director Krishnan Sitaraman said in the report.
He expects gold loans and home loans to stay resilient, with the least impact among segments.
The RBI, in its Financial Stability Report released last month, had said GNPAs of NBFCs increased to 6.3% as of March 2020 from 5.3% as of March 2019.
The report had said the asset quality of NBFCs is expected to deteriorate further due to disruption of business operations caused by the pandemic, especially in the industry sector, a major recipient of NBFC credit.