Page 25 - Banking Finance February 2018

ARTICLE

HOW NBFCS

MINIMISE

THEIR NPAS

T he Non-Banking Financial Companies (NBFCs) Sector witnessing an unprecedented

have made strong roots in the Indian Financial
growth
Sector. These financial institutions target niche
segments of the population and mostly help small
are growing speedily and gadgets like laptops, smartphones,
businesses or salaried employees with their momentary The demands and aspirations of India's middle-class segment
needs. After banks and insurance companies, NBFCs come and LED TVs are the common needs of almost every
at number 3 in the Indian financial system, while banks household in the urban culture of the country. Besides, life
could manage to grow credit at 5.1 percent in the final is difficult for many without a personal vehicle, if not a car;
quarter of the last fiscal year, NBFCs could register a credit a bike is must to have for families in metros and large cities.
growth of 250 percent more than banks - i.e., 13 percent.
According to a recent study by the Reserve Bank of India Their monthly income doesn't allow them to purchase these
(RBI), NBFCs are much ahead of commercial banks in items in one go and taking a personal loan from the
managing Non-Performing Assets (NPAs), and their asset commercial bank is lengthier as well as a costlier affair. So,
quality is also far better than banks. NBFCs are the best alternatives for them to borrow money
through quick and simple procedures. On the other hand,
empowered with data analytics, advanced profile check
About the author algorithms, smart credit rating system, and fast verification

tools, NBFCs are successful to meet the demands and
Rachit Chawla expectations of their customers.
CEO - Finway Capital
[a registered Non-Banking Financial Company (NBFC) It is worth noticing that NPAs and gross bad loans of the
with the Reserve Bank of India (RBI)] NBFC sector reduced from 2.7 percent to 2.3 percent and

BANKING FINANCE | FEBRUARY | 2018 | 25

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