Post on 15-Jun-2015
ANALYSIS OF NBFC SECTOR
SATHISH KUMAR R
ABIRAMI A
SARAVANA PRABHU B
Complimentary to banking system
12.7% of the total assets of financial system Operate largely in vehicle financing, hire purchase, lease, personal loans, working capital loans,
microfinance, consumer loans, housing loans, loans against shares, investments, distribution of financial products, etc
NBFC – Can accept only Demand deposits
Cost of funds
Business Model Flexibility – Limited reporting/documentation
Relaxed regulatory norms – Int. rate/ PSL/ Capital Market Exposure
DICGC not available, cannot issue cheques, NPA classification
Recovery Mechanisms – SARFAESI, DRT not present
Easy to obtain License, no restriction on
number of branches
KYC (know-your-customer) norms not Stringent
NPA Classification - 180 days vs 90 days
Well-informed rural
population
driving strong
credit growth
Advanced technologies to
accelerate operational efficiency by 30-40 per cent
Supporting Government
initiatives, such as the
National Rural Financial
Inclusion Plan
Innovative, diversified and customized product
portfolio
Growing per capita income
Flourishing consumer
credit market (Indian
consumer market to grow
by 67 per cent from 2013 to
2020)**
Favourable
regulatory
changes
* F
igur
es a
re in
mill
ions
* F
igur
es a
re in
mill
ions
F06 FY10 FY11
No of NBFCs 13014 12630 12409
Bank Credit of all scheduled Banks
1,572,780
3,337,659
4,060,843
NBFC advances as % of Bank Credit 10.77% 12.57% 13.20%
Assets of all scheduled banks
2,531,462
5,258,495
6,146,590
NBFC assets as a % of Bank assets 13.06% 13.33% 13.78%
Deposits of all scheduled banks
2,185,809
4,635,224
5,355,160
NBFC Public deposits as % of bank deposits 1.05% 0.37% 0.22%
* Fig
ure
s are
in cro
res
Usha Thorat Committee
Tier I Capital of 10%, as against 7.5% recently
NPA recognition norm to be lowered to 90 days from 180/360 days
Standard asset provisioning -0.40% from March 31, 2014.
Acceptance of Deposits
Liquidity Management
Raising money through private placement of debenture
NBFCs finance for Purchase of Gold – LTV 60%
THANK YOU!!!