In the 12 months to June 2013, growth of bank lending to non-banking finance companies (NBFCs) declined to 1.9 per cent compared to 44 per cent in the year-ago period. Banks are said to be wary of lending to NBFCs following stricter guidelines issued by Reserve Bank of India (RBI).
Data released by RBI shows in absolute terms, bank loan outstanding to NBFCs stood at Rs 2.58 trillion, slightly higher than Rs 2.54 trillion in the year-ago period.
Bank credit to NBFCs declined significantly during April-June 2013, when banks lent just Rs 20 crore to NBFCs, registering a growth of 0.8 per cent. The growth in the year-ago period stood at 11.4 per cent.
In May 2011, RBI started restricting bank lending to NBFCs by removing the so-called priority sector tag for bank loans to NBFCs, except for those loans given to companies operating in specific segments such as microfinance.
Leave a Reply
You must be logged in to post a comment.