'NBFCs' NPAs to rise 1% in FY22'

Mumbai: Non-bank lenders' non-performing asset ratios will slip by up to 1 percentage point and the ratio of the loans recast will double to 3.3 per cent in FY22, domestic rating agency Icra said. It attributed the asset quality impact largely to the reverses of the second wave of the pandemic, which has hit the collection efficiencies for the non-bank finance companies (NBFC) and housing finance companies (HFCs).

With the abatement of the pandemic and the resumption in business activity, the collections are improving and will offer some succour to the financiers as the fiscal year progresses, it said, adding that it has a "negative" outlook on the sector.

"Notwithstanding the near-term pressures, the net increase (adjusting for write-offs) in the 90+ dpd (days past due) in the current fiscal is expected to be about 0.50-1 per cent. ICRA draws comfort from the provisions maintained by the entities, which continue to remain about 1 per cent higher than the pre-Covid levels," its vice president for financial sector ratings A M Karthik said. The agency classified nearly a third of the overall non-bank exposures of Rs 24 lakh crore as being in "high risk category", flagging microfinance, personal credit, unsecured SME, real estate finance as the ones at highest risk and gold and housing at lowest.