State Bank of India Chairman Rajnish Kumar on Thursday quelled fears of liquidity crunch in the non-banking financial companies (NBFCs) and said all of them have rolled over the debt that were set to mature till date.
“All of them (NBFCs) have been able to meet their commitment as far as roll overs are concerned,” Kumar said, on the sidelines of the 25th World Congress organised by the World Savings and Retail Banking Institute, SBI and National Bank for Agriculture and Rural Development (Nabard). Kumar was responding to questions of liquidity crunch in the NBFC segment.
A staggering Rs 1.034 trillion of NBFC debt is set to mature by the end of November, according to data reviewed by Business Standard. There was a concern that failure to roll over these loans or another default, after the IL&FS crisis, could further rile markets as banks were reportedly hesitant to lend to NBFCs.
Concerned with the liquidity situation, the government has also demanded a special refinance window for NBFCs from the Reserve Bank of India. But the regulator has disagreed with the government’s view and maintained that cash crunch is not widespread. The government will continue to raise the issue of liquidity crunch faced by NBFCs in a crucial meeting of the RBI’s central board to be held on Monday.
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Nabard Chairman Harsh Kumar Bhanwala also said that the liquidity crisis may be an issue for NBFCs who have mismatch in assets and liabilities. “Issues arises on account some of entities who have borrowed short and created long assets so it may be a specific problem. It does not seem to be a systemic problem,” Bhanwala said.
Bhanwala expressed confidence that the contagion will not spread further and said all the NBFCs are meeting their commitments to Nabard. “We are not an aggressive lender in NBFCs. Our loan size is Rs 150 billion out of total assets of over Rs 4 trillion. From Nabard, we have given Rs 40 billion to NBFCs in the recent past as far as our commitment goes,” he added.