Synopsis
• The credit exposure of banks to Non-Banking Financial Companies (NBFCs) stood at Rs 14.8 lakh crore in October 2023, indicating a 22.1% year-on-year (y-o-y) growth. This expansion is indicative of the robust progress observed in NBFCs during the post-pandemic period. Furthermore, the proportion of NBFC exposure in relation to aggregate credit has risen from 9.4% in October 2022 to 9.6% in October 2023. On a month-on-month (m-o-m) basis, the amount rose by 4.0%. Meanwhile, the Mutual Fund (MF) debt exposure to NBFCs, including Commercial Papers (CPs) and Corporate Debt, witnessed an increase of 21.9% to 1.58 lakh crore in October 2023, while declining sequentially by 10.5% from September 2023.
• Highlighting the relative size of their exposure to NBFCs, MFs’ debt exposure to NBFCs remained at 10.7% as a percentage of “Banks’ advances to NBFCs” in October 2023 and October 2022, but declined sequentially from 12.5% in September 2023.
