Union Budget 2026-27: Here're key challenges in financial services sector

Rising unsecured loans, fintech-led credit growth and UPI frauds are straining NIMs, pushing NBFCs to seek refinance support, tax relief and easier recovery norms

Key challenges

• Pressure on net interest margin (NIMs) declines due to falling Current Account Savings Account ratios
• Unsecured  loans drive 53 per cent of retail slippages
• 36 per cent growth in fintech credit Y-o-Y , (70 per cent unsecured)
• Digital frauds tripled especially UPI-related scams
• Low financial literacy and legacy systems increasing vulnerability

Industry ask

• A dedicated refinance window for NBFCs, similar to NHB
• Easier SARFAESI enforcement norms for NBFCs
• Lower tax rates on fixed deposits to boost low-cost deposit mobilisation
• Fiscal support for private capex revival and strengthen financial system resilience