India’s Leading BFSI and FinTech Companies 2022

18 Over the years, Non-Bank Financial Companies (NBFCs) have taken a lead role in catering to the diverse financing requirements of Micro, Small and Medium Enterprises (MSMEs) and the rural segment. This way, NBFCs have played a crucial role by promoting financial inclusion. Current Scenario Despite the pandemic induced disruption, NBFCs remained well capitalised during FY21 and FY22, with their capital to risk-weighted asset ratio (CRAR) remaining well above the regulatory requirement of 15%. The comfortable level of capital adequacy ratio of NBFCs can be attributed to an increase in the level of Tier-I capital, retained earnings and moderation in non-performing assets consequent to the relief measures related to moratorium. Capital adequacy ratio (CRAR) of NBFCs witnesses improvement 23.8 22.5 22.9 26. 5 26.6 10 15 20 25 30 Mar-18 Mar-19 Mar-20 Mar-21 Sep-21 % Source: RBI, Economic Survey 2021-22 Leverage ratio of NBFCs has witnessed steady decline since Mar-19 till Sep-21 which point towards lower financial risks for NBFCs. A sharp decline in leverage ratio in FY21 can be mainly attributed to the substantial decline in cost of funds due to the accommodative monetary policy and liquidity support from the RBI. Leverage ratio of NBFCs declines 3.9 4. 1 4 3. 5 3.3 2 3 4 5 Mar-18 Mar-19 Mar-20 Mar-21 Sep-21 % Source: RBI NON-BANKING FINANCIAL COMPANIES (NBFC s ) Dun & Bradstreet