India’s Leading BFSI Companies 2020

XXIII provide a more level-playing field to the NBFCs, the RBI has undertaken certain policy measures in the recent past to ensure regulatory harmonization in the financial sector and to get rid of any regulatory arbitrage. Registrations & Cancellation of CoRs of NBFCs 0 200 400 600 800 1000 1200 1400 1600 1800 2000 FY16 FY17 FY18 FY19 FY20 (upto September) Registrations Cancellations As per the regulatory guidelines, only those NBFCs with a minimum net owned fund (NOF) of ` 2 crore are allowed to operate. As a result, fiscal 2019 saw a record number of cancellations of registration (CoR). This is reflective of the RBI’s proactive and vigilant approach to consolidate the NBFC sector. The number of NBFCs registered with the Reserve Bank declined from 9,856 at the end of March 2019 to 9,642 at the end of September 2019. Although the NBFC sector grew from ` 26.2 lakh crore in fiscal 2018 to ` 30.9 lakh crore in fiscal 2019, the pace of expansion was lower than in fiscal 2018 mainly due to rating downgrades and liquidity stress in a few large NBFCs in the aftermath of the IL&FS event. This slowdown was witnessedmainly in the NBFCs- ND-SI category, whereas, NBFCs-D broadly maintained their pace of growth. However, in fiscal 2020 (up to September) growth in balance-sheet size of NBFCs-ND-SI as well as NBFCs-D moderated due to a sharp deceleration in credit growth. Asset quality of NBFCs NPA Ratio of NBFCs and SCBs Asset Quality of NBFCs 0 4 8 12 Mar-16 Mar-17 Mar-18 Mar-19 NBFCs SCBs 0 2 4 6 8 FY14 FY15 FY16 FY17 FY18 GNPA Ratio NNPA Ratio Source: Supervisory returns, RBI In fiscal 2019, GNPA ratio NBFC-ND-SI deteriorated marginally, reflecting the maintenance of adequate buffers. The risk aversion among NBFCs-ND -SI coupled with their inability to mobilize adequate resources was reflected in the decrease in credit growth despite a fall in stressed assets ratio. However, for the services sector, stressed assets rose, reflecting the built-up stress in the real estate segment, where NBFC exposures are significant. Dun & Bradstr et