IGI Logo

The Reserve Bank of India (RBI) in its latest monthly bulletin has stated that amidst weakening global prospects, the Indian economy is gaining strength led by domestic drivers - private consumption and fixed investment with strong public sector capex. It further stated that supply responses are improving and headline inflation has softened in August from the previous month’s peak. According to the monthly bulletin, India’s G20 Presidency and its outcomes with the ethos of Vasudhaiva Kutumbakam as the vision of global progress assume significance in an environment where global economic activity is experiencing a loss of momentum with a dichotomy in macroeconomic conditions across regions.

The Bulletin includes six speeches, five articles and current statistics. In article ‘An Analysis of the Recent Performance of NBFC Sector’, it was noted that the consolidated balance sheet of the NBFC sector exhibited double digit year-on-year growth as at December 2022. Besides, NBFCs’ reliance on banks increased, particularly for NBFCs in the upper layer (NBFCs-UL), whose direct bank borrowings have grown steadily, accounting for nearly half of their total borrowings as at the end of December 2022.

Further, the sectoral credit distribution reveals that government-owned NBFCs in the middle layer (NBFCs-ML) lend primarily to infrastructure. All NBFCs-UL, which are privately-owned, lend overwhelmingly to the retail segment. With economic recovery underway, non-performing assets (NPAs) of the sector as per cent of total advances declined on account of lower accretion of fresh NPAs and better recoveries. NBFCs continue to maintain strong capital position and adequate buffers.