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Banks Stay Cautious on NBFC Lending: Ind-Ra View

28 February 20251 min read
BANKING & FINANCEBanks StayCautious on NBFCLending: Ind-RaView28 February 2025safalsetu.com

Why in the news

Ind-Ra said banks will remain careful on NBFC lending due to sector performance worries.

Key facts

  • Focus on top-tier, higher-rated NBFCs; weaker ones seen as high risk.
  • Secured and unsecured NBFC loans show stress; asset quality pressure visible by FY26.
  • No early cut in lending rates to NBFCs.

Microfinance

  • Rising MFI delinquencies and softer consumer incomes lift defaults.
  • Nomura Research: MFI stress discourages more bank exposure.

Outlook

  • Asset quality stress in NBFCs and MFIs will weigh on lending sentiment.
  • Strong risk aversion keeps loan pricing elevated.

Exam angle

  • Agency: India Ratings & Research.

Test yourself

1. Which rating agency official, Pankaj Naik, commented on banks staying conservative in NBFC lending?

Pankaj Naik is Director at India Ratings & Research (Ind-Ra).

2. Banks will mostly restrict their lending exposure to which kind of NBFCs?

Banks will focus on top-tier, higher-rated NBFCs.

3. NBFC asset quality pressure is expected to become visible by which financial year?

Asset quality pressure should be visible by FY26.

This topic is part of Daily Current Affairs 28 February 2025 (13 topics).

All topics of the dayDay quizFebruary 2025

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