अब आप न्यूज्ड हिंदी में पढ़ सकते हैं। यहाँ क्लिक करें
cyfy
Home » Economy » No near-term recovery for India’s NBFIs: Fitch Ratings

No near-term recovery for India’s NBFIs: Fitch Ratings

An investor poll at the annual Fitch on India event, held in early July, revealed that more than 75 per cent of participants believed Indian NBFIs would take more than one year to show a convincing recovery in light of the effects of the pandemic.

By IANS
Updated on :
Source: Banking Finance

A near-term recovery for India’s non-bank financial institutions (NBFIs) is not probable due to the fallout of coronavirus pandemic, Fitch Ratings said on Monday.

An investor poll at the annual Fitch on India event, held in early July, revealed that more than 75 per cent of participants believed Indian NBFIs would take more than one year to show a convincing recovery in light of the effects of the pandemic.

“The poll results are in line with Fitch’s expectations. We believe the significant economic disruption and prevailing uncertainty caused by the pandemic will impede a return to a more normal operating environment for NBFIs, with consequences for new loan disbursements, asset quality and provisioning, sector profitability, and funding conditions,” the rating agency said in a statement.

“We see uncertainty stemming from depressed consumer demand and a sustained high level of coronavirus infections, notwithstanding a gradual economic reopening that has improved collections and funding availability since June 2020.”

According to the statement, for around two years now, the sector has been in a crisis, which was triggered by the default of Infrastructure Leasing & Financial Services, and nearly 40 per cent of investors polled still expect it to take another two years before a recovery is evident.

“This is longer than Fitch’s base-case assumption, but a downside scenario – where the economy continues to struggle to recover in the aftermath of the pandemic – could prolong the sector downturn beyond the two-year horizon and cause irreversible damage to parts of the NBFI industry, with mid- to small-sized franchises at greatest risk of branch closures and staff redundancies to trim costs,” the statement said.

“In this scenario, more firms could exit from underperforming business segments.”

–IANS

(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
(For more latest news and updates Like us on Facebook, Follow us on Twitter. Download our mobile app )

Related

Latests Posts


Editor's Choice


Trending