Growth in credit to the non-banking financial company (NBFC) sector plummeted to 7.8 per cent year-on-year (Y-o-Y) in the fortnight ending November 29, 2024, compared to a 19 per cent increase during the same period of 2023. This slowdown contributed to a decline in growth of credit to the services sector, which fell to 14.4 per cent from 22.2 per cent Y-o-Y, according to sectoral deployment data released by the Reserve Bank of India (RBI).
The slowdown in credit growth to the NBFC sector can largely be attributed to the RBI's decision in November last year to increase risk weights on bank funding to NBFCs. This move prompted the shadow banks to diversify their funding sources. Now, NBFCs have increasingly turned to the domestic capital market, raising funds through bonds, as well as the overseas market, tapping into dollar bonds and syndicated loans.
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Denne historien er fra January 02, 2025-utgaven av Business Standard.
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