Latest news with #NBFIs
Mint
4 days ago
- Business
- Mint
Big non-banking lenders in India are gaining trust and growing fast: Fitch Ratings
New Delhi [India], June 19 (ANI): India's non-bank financial institutions (NBFIs) are growing strongly, with large lenders leading the way, says Fitch Ratings. These institutions offer a wide range of financial services, and their credit ratings depend on how strong and stable their business models and finances are. According to Fitch, large NBFIs with a proven track record are earning more trust from investors and lenders. This growing confidence is helping them stay ahead of smaller players in the sector. By the end of September 2024, 17 major NBFIs tracked by Fitch had increased their share of the total loan market to 38 per cent, up from 30 per cent in March 2022. These leading lenders recorded an annual loan growth rate of 20 per cent during this period, much higher than the 9 per cent growth rate of the overall NBFI sector. These big NBFIs have also become financially stronger. Their debt-to-equity ratio -- a measure of how much they borrow compared to their own funds -- dropped from 4.5 times in 2021 to 4.3 times by mid-financial year 2025. This improvement came from raising more capital and keeping profits within the business, especially during the COVID-19 pandemic. Lower debt levels help reduce the risk of financial trouble if loan repayments slow down. Fitch expects this trend to continue, with most NBFIs using their earnings to fund future growth rather than paying out large dividends. Despite slower global economic growth, India's NBFI sector continues to expand. The sector includes a wide variety of companies offering different types of loans. In cities, competition is tough for secured loans like home or car loans. But in rural areas, some NBFIs face less competition from banks. However, higher costs and greater credit risks in rural lending can affect profitability, depending on how well the loans are managed. Fitch also highlights that the type of loans an NBFI focuses on plays a big role in its success. Those with deep experience and large operations in specific segments tend to have more stable and sustainable businesses. Many NBFIs lend to non-prime customers -- people who may not get easy loans from banks -- which can help them earn higher margins, unless banks enter the same market. Large NBFIs benefit from their size and strong market position. They usually have better access to funding, more control over pricing, and lower costs. Those that lead in their lending areas are better able to manage risks and stay profitable, even during economic ups and downs. Companies backed by large corporate groups may also get easier access to funds and benefit from group support.
India Gazette
4 days ago
- Business
- India Gazette
Big non-banking lenders in India are gaining trust and growing fast: Fitch Ratings
New Delhi [India], June 19 (ANI): India's non-bank financial institutions (NBFIs) are growing strongly, with large lenders leading the way, says Fitch Ratings. These institutions offer a wide range of financial services, and their credit ratings depend on how strong and stable their business models and finances are. According to Fitch, large NBFIs with a proven track record are earning more trust from investors and lenders. This growing confidence is helping them stay ahead of smaller players in the sector. By the end of September 2024, 17 major NBFIs tracked by Fitch had increased their share of the total loan market to 38 per cent, up from 30 per cent in March 2022. These leading lenders recorded an annual loan growth rate of 20 per cent during this period, much higher than the 9 per cent growth rate of the overall NBFI sector. These big NBFIs have also become financially stronger. Their debt-to-equity ratio -- a measure of how much they borrow compared to their own funds -- dropped from 4.5 times in 2021 to 4.3 times by mid-financial year 2025. This improvement came from raising more capital and keeping profits within the business, especially during the COVID-19 pandemic. Lower debt levels help reduce the risk of financial trouble if loan repayments slow down. Fitch expects this trend to continue, with most NBFIs using their earnings to fund future growth rather than paying out large dividends. Despite slower global economic growth, India's NBFI sector continues to expand. The sector includes a wide variety of companies offering different types of loans. In cities, competition is tough for secured loans like home or car loans. But in rural areas, some NBFIs face less competition from banks. However, higher costs and greater credit risks in rural lending can affect profitability, depending on how well the loans are managed. Fitch also highlights that the type of loans an NBFI focuses on plays a big role in its success. Those with deep experience and large operations in specific segments tend to have more stable and sustainable businesses. Many NBFIs lend to non-prime customers -- people who may not get easy loans from banks -- which can help them earn higher margins, unless banks enter the same market. Large NBFIs benefit from their size and strong market position. They usually have better access to funding, more control over pricing, and lower costs. Those that lead in their lending areas are better able to manage risks and stay profitable, even during economic ups and downs. Companies backed by large corporate groups may also get easier access to funds and benefit from group support. Fitch says that when it rates NBFIs, it looks at how stable their business is, how much risk they take, how strong their finances are, how easily they can raise money, and how well they follow rules. (ANI)
Hindustan Times
29-05-2025
- Business
- Hindustan Times
The changing contours of private credit
Despite a seemingly endless supply of and demand for private credit, the rapid expansion of the market has been a cause of concern for some regulators and executives. Should investors be worried? This brief explores certain aspects of private credit that warrant a close look—including the retailisation of the market and the current interest rate environment. It highlights the implications for financial stability, including the potential for finance to be rendered a disservice to the real economy. The financial cycle is never eradicated, nor is financial instability ever really extinguished. On the contrary, financial risk moves like liquid mercury out of certain entities and into others. And increasingly credit-fuelled economies are especially prone toward credit crises. In many ways, regulation can be backward-looking, and thus can often be directed toward the last crisis. Over 17 years since the Global Financial Crisis (GFC), regulators maintain a keen focus containing banking crises; justifiably so, as the recent banking wobbles in the United States (US) in March 2023—and those which rippled across the Atlantic—demonstrate that risks are still inherent (and perhaps contagious) within the global financial system. And yet, looking beyond the traditional banking system, potential vulnerabilities lurk within certain elements of the system of non-bank financial institutions (NBFIs). The late American economist, Hyman Minsky observed that strong medicine can have strong side effects. And one side effect of the regulation imposed upon globally systemic important banks (GSIBs) in the wake of the GFC has been for a swelling of assets under management (AUM) held by the NBFIs. As shown in Figure 1, since the GFC, the spread between the global AUM held by the shadow banks (NBFIs) and those held by the traditional banks has widened considerably. Accordingly, the Financial Stability Board (FSB) has been focused on 'strengthening the resilience' of the NBFIs on a global basis, given the lack of transparency and systemic stress testing within the industry. This paper can be accessed here. This paper is authored by Alexis A Crow, ORF, New Delhi.
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Business Standard
22-04-2025
- Business
- Business Standard
PSU banks lead incremental credit while share of private banks falls
The state-owned banks continued to be the major drivers of incremental credit, while the share of private sector banks has declined, the Reserve Bank of India (RBI) said in a bulletin. At the same time, banks' credit growth moderated to 12 per cent in FY25 from around 15 per cent in March 2023. Although non-food credit increased at a decelerating pace of 12 per cent year-on-year (Y-o-Y), compared to 16.3 per cent a year ago, according to the bulletin. Meanwhile, agricultural credit growth remained in double digits at 11.4 per cent in February 2025, though it moderated from 20.0 per cent in February 2024. Despite some deceleration in the growth of credit to the services sector and personal loan segments at 13.0 per cent and 14.0 per cent, respectively, in February 2025, they remained the prime drivers of non-food credit growth during the second half of FY25. Further, the bulletin mentioned that credit to the micro, medium and small enterprises (MSME) segment remained robust, registering a growth of 12.3 per cent in February 2025. However, credit to the large industry segment recorded modest growth in H2. In the Union Budget for FY26, the credit guarantee cover for micro and small enterprises was increased from Rs 5 crore to Rs 10 crore. Going forward, the MSME sector is expected to receive a boost in credit due to changes in classification and priority sector lending treatment. On the other hand, credit growth to the services sector moderated in H2, mainly attributed to decelerated credit growth to non-banking financial institutions (NBFIs). Credit growth of non-banking financial companies (NBFCs) fell to 13.3 per cent in February 2025 from 18.6 per cent in February 2024, reflecting the impact of the increase in risk weights, which has now been reversed effective April 1, 2025.
Associated Press
10-04-2025
- Business
- Associated Press
Montran Wins Central Banking Award for Payment Services Development
NEW YORK, April 10, 2025 /CNW/ -- Montran has been honored with the 'Payment Services Development' award at the Central Banking Awards. This prestigious recognition underscores Montran's commitment to achieving financial infrastructure interoperability through our Instant Payments System (IPS). The deployment of the Montran IPS in various regions around the world has been instrumental in empowering central banks, clearinghouses, commercial banks, NBFIs, MNOs, merchants, agents and end-users with a cutting-edge interoperable instant payment solution. With ten live instant payment systems (IPS) deployed across the globe—from Angola to Panama—Montran continues to empower financial ecosystems with innovative solutions that enhance transaction speed, security, and accessibility. The recent go-live of BORICA's TIPS Connectivity Module in Bulgaria further demonstrates Montran's commitment to advancing cross-border instant payments, ensuring operational efficiency and compliance with European standards. Driving Instant Payments Forward Montran's IPS platform has been designed for scalability, flexibility, and security, making it the preferred choice for central banks and national clearing systems. Built to support 24/7 real-time processing, the system offers: Advanced fraud management to safeguard transactions Seamless QR code-based payments for instant digital transactions 5,000+ transactions per second processing capacity Direct integration with international systems, including ECB TIPS and PAPSS Since the launch of its first IPS production system in 2018, Montran has continuously enhanced its platform with proxy alias modules, advanced liquidity management, and configurable fraud detection tools—ensuring a future-proof payment infrastructure. 'As instant payments become the global standard, we remain committed to helping central banks and financial institutions accelerate digital transformation with scalable, reliable financial infrastructure,' said Cristi Jurca, IPS Product Owner at Montran. Global Expansion & Future Innovations Montran's instant payments ecosystem is growing rapidly, with three additional systems currently in progress and major initiatives underway in Guatemala and Asia. The company is also focused on integrating IPS with emerging financial technologies, including Central Bank Digital Currencies (CBDCs) and enhanced fraud risk management solutions. 'The evolution of digital payments is accelerating, and Montran is leading the way by providing robust, real-time financial solutions that drive economic growth and financial inclusion,' said Ciprian Tesa, Chief Technology Officer at Montran. Montran remains committed to its purpose to unify the world financially by equipping central banks, financial institutions, and payment service providers with next-generation digital payment technology. About Montran Montran is the leading provider of Payment and Capital Market Infrastructure solutions, servicing the world's foremost financial institutions with mission critical installations and operations in over 90 countries. Discover more at
