MUMBAI : Restrictions in movements imposed by various states are likely to impact collections of non-banking financial companies (NBFCs) and housing finance companies (HFCs), which may see NPAs rising to 4.5 - 5% by March 2022, says a report.
Icra Ratings said non-banks (NBFC and HFCs) will feel the stress of the second wave of Covid-19 and movement restrictions imposed by various states in April-May 2021, given the fact that 25-30% of their loan collections happen through field collection teams and largely via cash. "We expect the non-bank reported NPAs to increase to about 4.5-5% by March 2022 vis a vis about 4% in December 2020."This in-turn would keep the earnings subdued in the current fiscal; about 30% lower than the pre-Covid.