Easing financing conditions may boost NBFCs' credit prospects: FM Nirmala Sitharaman

NEW DELHI: Easing of financing conditions is expected to help improve credit prospects for the NBFC sector, according to finance minister Nirmala Sitharaman. Recent regulatory measures, such as the restoration of risk weights on bank lending and easing of financial conditions, are anticipated to further enhance credit prospects, thereby strengthening the overall funding environment for the NBFC sector, she said on Wednesday.

"With the recent RBI measures reducing the costs of funds to the sector, I urge NBFCs to pass on the benefits of this reduction to customers," she said at the NBFC conclave. Govt remains committed to supporting the NBFC sector by enabling a responsive policy environment. "I want to assure the industry that we are committed to a consultative approach, and the issues flagged in the consultations with NBFCs will be examined," FM said.

She said deep collaboration between NBFCs and banks, especially through co-lending arrangements, needs to be established. She said such partnerships should be institutionalised and scaled. "A seamless digital co-lending architecture, common onboarding standards, and interoperable servicing platforms can enhance credit flow to underserved sectors," she said.

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