IGI Logo

Remaining positive about NBFCs outlook, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that non-bank finance companies (NBFCs) are much better placed to handle the possible impact of the ongoing third covid wave.

According to the report, while the third wave is more rapidly spreading, the need for hospitalisation and casualty has been lower while the healthcare infrastructure seems to be prepared to cope with the rising numbers. The probability of a severe nationwide lockdown, at the moment, seems low with restrictions being imposed at the regional level. In absence of any restrictions, the impact on the cash flow of NBFC borrowers may remain modest. Furthermore, a large proportion of the weaker borrowers of NBFCs would have been filtered out in the first two waves.

Ind-Ra further underlined initiatives taken by NBFCs during previous lockdowns. It said that non-banks navigated the periods of business disruptions during the first two covid waves by tweaking processes, digitising certain operations, restricting operating hours and physical movement, slowing down disbursements, focusing on collections and vaccinating their staff.

The rating agency also said that NBFCs also reached out to their customers and offered relief measures with the help of the moratorium scheme applicable from March to August 2020 and restructuring packages announced by the Reserve Bank of India in August 2020 and May 2021.