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Declining bank deposits raise concerns about NBFC's fund raising capacity
The Business Guardian
|August 12, 2024
Amid the concerns of declining deposits at banks, CareEdge Ratings anticipated that the credit deposit ratios may pose a concern to the Non-Banking Financial Companies (NBFCs).
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“Bank’s credit-deposit ratios raise concerns about NBFCs’ ability to secure funds,” it said.
By definition, the credit-deposit ratio (CD ratio) is a tool that measures how much of a bank’s deposits are lent out as loans.
The report by the rating agency added that enhanced regulatory supervision will lead to higher compliance costs. However, emphasising the need to have greater supervision, it noted its importance for the stability of the sector.
“There is a growing discussion on the need to monitor the end-use of funds by NBFC. Additionally, smaller NBFCs and smaller fintechs are facing challenges on the liability side, underscoring the need for strategic solutions to address these challenges,” CarEdge said in the report.
Cette histoire est tirée de l'édition August 12, 2024 de The Business Guardian.
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