Access to funding improves for NBFCs but not yet at pre-IL&FS level

Debt capital markets continue to shy away from the shadow banking sector

India’s shadow banking sector seems to be coming out of its blues and banks have opened their credit tap. However, the bond markets continue to be suspicious as some non-banking finance companies (NBFCs) continue to default or are struggling to get buyers in resolution processes.

NBFCs are certainly not as flush with liquidity as they were in the pre-IL&FS period, but Reserve Bank of India (RBI) Governor Shaktikanta Das said on Tuesday that the stress had been contained to three-four large firms, from 10-12 a few months ago.

Das said in an interview to Bloomberg that, overall, there was improvement