New Reserve Bank of India norms on debt restructuring are likely to hit the profitability of already distressed non-banking financial companies (NBFCs). The new RBI circular does not give any additional advantage or benefit to NBFCs, said Raman Aggarwal, chairman, Finance Industry Development Council (FIDC), an industry body for NBFCs. Further, in such cases, the NBFC’s role shall be highly subdued since their share in the overall value would be below 75%. Just three weeks ago, RBI had also come out with draft liquidity norms for NBFCs, proposing liquidity buffers for these firms. But NBFCs and HFCs with AAA rating representing over 40% of NBFC credit and 60% of HFC credit respectively, as per our estimates, should not face funding constraints.

Source: Mint June 12, 2019 18:11 UTC