Page 515 - ES 2020-21_Volume-1-2 [28-01-21]

142 Economic Survey 2020-21 Volume 1

Figure 15: Growth (YoY) in mutual fund lending to NBFCs

Source: SEBI

4.38 The external liabilities of NBFCs in the form of secured and unsecured borrowings
and public deposits increased by 13.7 per cent on YoY basis in June 2020. Borrowings from
other financial institutions increased from ` 69,965 crore in March 2020 to ` 1,11,841 crore
in June 2020, resulting in a YoY growth of around 226 per cent. Further, borrowings through
Commercial Paper (CPs) also increased from ` 71,734 crore in March 2020 to ` 95,439 crore in
June 2020.

4.39 Cost of funds for all types of borrowings by NBFCs marginally declined in June 2020,
compared to March 2020 or June 2019, except for Non-Convertible Debentures (NCDs).
Cost of NCDs, which contribute to major source of funds for NBFCs, increased marginally

from 8.1 per cent in March 2020 to 8.2 per cent in June 2020. On the other hand, cost of CPs
had declined from 7.0 per cent to 5.9 per cent during the same period.

4.40 As against the regulatory requirement of 15 per cent, CRAR for the NBFC sector stood
at 22.05 per cent at the end of June 2020, showing improvement over March 2020 when it was
20.62 per cent. Asset quality of NBFCs deteriorated moderately with GNPA ratio at 6.44 per
cent at the end of June 2020 as against 6.30 per cent as at end-March 2020 and 5.60 per cent as
at end-March 2019. However, Net NPA ratio improved marginally to 2.99 per cent at the end of
June 2020 as against 3.09 per cent in March 2020. RoA for the NBFC sector was 0.4 per cent
in June 2020 as compared with 0.6 per cent in June 2019, while RoE was 1.7 per cent in June
2020 as compared to 2.6 per cent in June 2019.