Performance of the NBFC Sector in India
The NBFC sector is showing strong resilience under the scale-based regulations (SBR) framework.
As of December 2023, the sector maintained double-digit credit growth.
The gross non-performing asset (NPA) ratio improved significantly, with government NBFCs at 2.4% and non-government NBFCs at 6.3%.
There has been a consistent rise in profitability, reflected in improved return on assets (RoA) and return on equity (RoE).
Resilience and Positive Trends Under the SBR Framework
Since the SBR was introduced in October 2022, performance metrics have improved.
NBFCs have maintained adequate capital levels and low delinquency ratios.
The extension of prompt corrective action (PCA) norms to government-owned NBFCs is expected to enhance financial discipline and risk management.
Major NBFCs have been identified as part of the upper layer under the SBR framework, further strengthening the sector's stability.
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