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Profitability of NBFCs improves in FY18 and H1FY19: RBI

31 Dec 2018 Evaluate

Soothing some worries, Reserve Bank of India (RBI) in its latest report has said that the consolidated balance sheet of NBFCs expanded in 2017-18 and during the first half of 2018-19 and further noted that the profitability of NBFCs improved on the back of fund-based income, relatively lower NPA levels and strong capital position.

The report found that retail loans of NBFCs witnessed a growth of 46.2% during 2017-18-on top of a growth of 21.6% during 2016-17-reflecting upbeat consumer demand, especially in the vehicle loans segment. Besides, it said that NBFCs’ lending to the micro, small and medium enterprises (MSME) sector was also robust, compensating for the deceleration in SCBs’ credit.

On the profitability indicators, the apex bank said that NBFCs’ returns on equity (RoE) and returns on assets (RoA)- were higher during 2017-18 than a year ago, even though they saw fall in the net interest margin (NIM).

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