Heading for a contraction in the present fiscal, the primary time in greater than a decade, belongings beneath administration (AUM) of non-banking monetary corporations (NBFCs) are set to develop once more at a comparatively subdued 5-6% subsequent fiscal. The turnaround might be led by bigger entities with stronger parentage, prime executives at CRISIL mentioned.
“Despite an estimated GDP growth of 10% next fiscal, the overall NBFC sector growth is likely to be slower because access to funding remains a challenge due to concerns about the impact of the pandemic on asset quality.” Gurpreet Chhatwal, president, CRISIL Ratings, mentioned in an online convention. “Additionally, competition is expected to be more intense from banks which are flush with low-cost deposits and better placed with improved capital buffer than in the previous years,” he added.
While development could be a problem in the close to time period, it’s vital to be careful how asset high quality pans out as we strategy the following fiscal, Mr. Chhatwal mentioned.