Growth gathers steam for NBFCs in H1FY21 as balance sheets expand 12%: RBI

In view of the pandemic, and also in order to maintain adequate liquidity, NBFCs increased their cash and bank balances significantly during the year, RBI report said

The growth momentum seems to be back for finance companies. Their balance sheets expanded at 12.1 per cent (year-on-year basis) till September 2020 (H1FY21), up from 8.9 per cent for 2019-20 (FY20). In 2018-19, it had clocked 20.6 per cent growth.

The year 2019-20 marked a significant moderation in NBFCs’ financial performance, after double-digit balance sheet growth in the previous three years, according to a report on Trends and Progress in Banking in India. The Reserve Bank of India publishes this report annually.  

A challenging macroeconomic environment, weak demand compounded by risk aversion, liquidity stress and rising borrowing costs in