Time ripe for asset quality review of NBFCs, says Arvind Subramanian

An AQR for NBFCs, including HFCs, is necessary given the uncertainty over NPAs, says the former chief economic adviser

Non-banking finance companies (NBFCs), which are facing liquidity challenges, are in need of an asset quality review (AQR) to know the stress level and to work on solutions for them, said former chief economic adviser Arvind Subramanian.   

Subramanian, now a professor at Harvard University in the US, said the AQR for banks (in 2015-16) had an important positive effect as it brought to light the issues and the lenders couldn't hide the problem. If you hide the problem, you also can't galvanise the political will to address it, he said. 

An AQR for NBFCs, including housing finance companies (HFCs),