Liquidity crisis triggered by IL&FS to have deeper impact on NBFCs: Moody's

The report said liquidity tightness could lead to sharply higher financing costs for NBFIs

Non-bank financial companies (NBFCs) are likely to be impacted significantly if the liquidity situation, triggered by IL&FS default, continues to remain tight, according to a report.

Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries are facing liquidity crisis and has defaulted on debt repayment. The default by IL&FS has also impacted other NBFCs and also mutual fund players.

"Non-bank financial institutions (NBFI) will be significantly impacted if the liquidity distress in the country's capital markets, triggered by the default in September 2018 of IL&FS, prolongs for an extended period of time," rating agency Moody's said in a report.

The rating agency's vice