A challenge and an opportunity

As concerns move from liquidity to solvency of select NBFCs, uncertainty is the bigger challenge

The credit outstanding with Non-Banking Finance Companies (NBFCs: in this article this includes the Housing Finance Companies or HFCs as well) was 28 per cent of banking system credit in March 2018, versus 19 per cent in 2014, and just 14 per cent in 2007. Perhaps more importantly, they have accounted for nearly a third of incremental credit in the last three years, stepping in as the public sector banks (PSBs) slowed. Therefore, much more than prior such cycles, as their growth slows down due to a protracted difficulty in accessing funds, there could be a significant impact on economic