The rapid increase in Covid-19 afflictions and intermittent lockdowns will increase asset quality challenges of non-banking financial companies (NBFCs), already grappling with the economic slowdown since last fiscal, Crisil Ratings said on Friday. According to Crisil, the trend in monthly collection efficiency till August 31, 2020 (unadjusted for moratorium) shows there is still some way to go before reaching pre-pandemic levels.
While the recent restructuring scheme afforded by the Reserve Bank of India (RBI) would be a leash on reported non-performing assets (NPAs), underlying challenges continue.Loan delinquencies of NBFCs could dart up 50-250 basis points (bps) this fiscal, depending on the segment of operation, because of vulnerability in borrower cash flows.