NBFC's assets cross Rs 54 lakh crore mark

23 Nov 2022 , 09:06 AM

According to Union Minister Bhagwat Krishanrao Karad on Tuesday, the asset base of non-banking financial businesses has surpassed Rs 54 lakh crore as of March 2022, accounting for close to a quarter of the commercial banking sector’s balance sheet.

It should be recalled that the shadow banking sector has been in a protracted crisis since the collapse of the two largest non-banking financial companies (NBFCs), IL&FS and Dewan Housing Finance Ltd (DHFL).

As banks avoided them on the one hand and the RBI continued to tighten the regulatory noose around them, this crisis was more about their capacity to mop up lendable money. As a result, since November 2021, they have been on a level with banks in terms of bad loan recognition.

The Union Minister of State for Finance stated at an NBFC summit hosted by the CII that NBFCs have become the main economic growth driver by being a crucial source of finance for small and medium-sized businesses.

NBFCs are making investments in big data and artificial intelligence. According to the minister, it will also close the financial gap in the upcoming years because of its cheap operating costs, and NBFCs have developed into a potent substitute for the banking industry.

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