RBI released a statement stating that going forward the profitability of Non-Banking Financial Company (NBFC) may be dampened due to loan impairment, lower credit demand, and a tendency to preserve cash.
The reasons could be loan moratoria and asset classification standstill & asset quality being shored up. Various NBFCs have already made additional provisioning as per there expected credit loss norm & have bolstered their capital position by ploughing back dividends.
RBI said going forward it remain cautious in maintaining the sector’s stability amid growing challenges during the pandemic.
