RBI has increased the risk weightage for unsecured loans. Crisil said in its report that due to this, the asset growth of NBFCs in FY24 may be less than the estimated 16-18 percent.
Recently, Reserve Bank of India had increased the risk weightage for unsecured loans by 25%. The central bank believes that it is important to maintain quality regarding retail consumer loans. This will affect banks and NBFCs. After this decision of RBI, rating agency Crisil said that the growth of India’s non-banking financial company (NBFC) sector in the current financial year may be less than the estimated 16-18 percent.
Next fiscal loan growth may be 14-17%
The rating agency said the assets under management (AUM) of the country’s non-banking financial companies (NBFCs) are likely to register a healthy growth of 14-17 per cent in the next financial year due to continued strong demand across all retail lending sectors.
However, the growth rate in the current financial year may be marginally lower than the estimated 16-18 per cent, as the unsecured retail loan segment, by far the fastest growing in NBFC AUM, is expected to have relatively slow growth.
Demand will remain in retail loan lending
The reason for this is that NBFCs are busy reshaping their strategies in accordance with the recent instructions issued by the Reserve Bank. Crisil said diversification in product offerings and financing profiles will play an important role in the NBFC’s growth strategy going forward. According to the rating agency, retail credit growth of NBFCs will continue to be driven by strong underlying macro and micro economic factors.
Housing finance companies will not be affected
Crisil Ratings Managing Director Gurpreet Chatwal said in a webinar that the recent regulatory measures are targeted at unsecured retail loans but do not impact secured asset groups. Apart from this, the regulatory instructions are not going to affect housing finance companies (HFCs).
