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Nbfc industry analysis

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Nbfc industry analysis

  1. 1. ANALYSIS OF NBFC SECTOR SATHISH KUMAR R ABIRAMI A SARAVANA PRABHU B
  2. 2.  Complimentary to banking system  12.7% of the total assets of financial system  Operate largely in vehicle financing, hire purchase, lease, personal loans, working capital loans, microfinance, consumer loans, housing loans, loans against shares, investments, distribution of financial products, etc
  3. 3. NBFC – Can accept only Demand deposits Cost of funds Business Model Flexibility – Limited reporting/documentation Relaxed regulatory norms – Int. rate/ PSL/ Capital Market Exposure DICGC not available, cannot issue cheques, NPA classification Recovery Mechanisms – SARFAESI, DRT not present  Easy to obtain License, no restriction on number of branches  KYC (know-your-customer) norms not Stringent  NPA Classification - 180 days vs 90 days
  4. 4. Well-informed rural population driving strong credit growth Advanced technologies to accelerateoperational efficiency by 30- 40 per cent Supporting Government initiatives, such as the National Rural Financial Inclusion Plan Innovative, diversified and customized product portfolio Growing per capita income Flourishing consumer credit market (Indian consumer market to grow by 67 per cent from 2013 to 2020)** Favourable regulatory changes
  5. 5. *Figuresareinmillions
  6. 6. *Figuresareinmillions
  7. 7. F06 FY10 FY11 No of NBFCs 13014 12630 12409 Bank Credit of all scheduled Banks 1,572,780 3,337,659 4,060,843 NBFC advances as % of Bank Credit 10.77% 12.57% 13.20% Assets of all scheduled banks 2,531,462 5,258,495 6,146,590 NBFC assets as a % of Bank assets 13.06% 13.33% 13.78% Deposits of all scheduled banks 2,185,809 4,635,224 5,355,160 NBFC Public deposits as % of bank deposits 1.05% 0.37% 0.22% *Figuresareincrores
  8. 8.  Usha Thorat Committee  Tier I Capital of 10%, as against 7.5% recently  NPA recognition norm to be lowered to 90 days from 180/360 days  Standard asset provisioning -0.40% from March 31, 2014.  Acceptance of Deposits  Liquidity Management  Raising money through private placement of debenture  NBFCs finance for Purchase of Gold – LTV 60%
  9. 9. THANK YOU!!!

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