Latest news with #NBFIs
Business Recorder
01-08-2025
- Business
- Business Recorder
Saving account holders: FIs, NBFIs urged to consider plight
KARACHI: There has been a great demand by the business community to significantly cut the interest rate in the monetary policy saying a cut in policy rate will provide breathing space for industrial revival and job creation. To the great surprise by experts and the business community, the State Bank of Pakistan decided to keep the policy rate unchanged at 11 percent citing concerns over a higher inflation outlook, unanticipated adjustments in administered energy prices and potential of widespread floods said Ateeq-ur-Rehman (economic and financial analyst). Under the challenging economic conditions by the middle class surviving for safe shelter, food, medicine, education, clean water, electricity, gas, public transport etc, the banks, financial institutions and NBFIs should consider the agony and anguishes of their saving account holders, mostly senior citizens, disabled, pensioners, endowment fund holders, etc. The reduction in interest rate is continuously reducing their income of reliance and daily bread, added Ateeq. Again, a savings account holder for example a widow/ a non filer is payable a tax by 30 percent (WHT), further on her withdrawal of profit in cash has to pay 0.8 percent as another WHT for Rs 50,000 and above withdrawal. There is a pressure on saving account holders to convert their accounts into current accounts, so what are the compliances and benefits available through current account. Consequently, banks & financial institutions should bring relief to the economic growth from saving prospective, particularly the industry/business and the poor saving account holders. Copyright Business Recorder, 2025
The Star
18-07-2025
- Business
- The Star
10 banks rated sustainable in Bangladesh
DHAKA, July 18 (Xinhua) -- Only 10 private commercial banks and two non-bank financial institutions (NBFIs) in Bangladesh have been rated as sustainable financial institutions by the central bank. Bangladesh Bank (BB) made the rating in its "Sustainability Finance Report 2024" unveiled recently. BB said its evaluation was based on five key indicators: the Sustainable Finance Index, CSR activities, green project financing, the Core Banking Sustainability Index, and Banking Services Coverage. Bangladesh has currently 43 private commercial banks, six state-owned commercial banks, three specialized banks, nine foreign banks, and one digital bank which all together make up the total of 62 banks in the country. Apart from them, there are 35 NBFIs in the country which is now on the brink of a full-scale banking crisis, exacerbated by economic stagnation and political upheaval following the collapse of the previous regime. At the heart of this crisis reportedly lies a banking sector plagued by skyrocketing non-performing loans and pervasive financial mismanagement.
Mint
19-06-2025
- Business
- Mint
Big non-banking lenders in India are gaining trust and growing fast: Fitch Ratings
New Delhi [India], June 19 (ANI): India's non-bank financial institutions (NBFIs) are growing strongly, with large lenders leading the way, says Fitch Ratings. These institutions offer a wide range of financial services, and their credit ratings depend on how strong and stable their business models and finances are. According to Fitch, large NBFIs with a proven track record are earning more trust from investors and lenders. This growing confidence is helping them stay ahead of smaller players in the sector. By the end of September 2024, 17 major NBFIs tracked by Fitch had increased their share of the total loan market to 38 per cent, up from 30 per cent in March 2022. These leading lenders recorded an annual loan growth rate of 20 per cent during this period, much higher than the 9 per cent growth rate of the overall NBFI sector. These big NBFIs have also become financially stronger. Their debt-to-equity ratio -- a measure of how much they borrow compared to their own funds -- dropped from 4.5 times in 2021 to 4.3 times by mid-financial year 2025. This improvement came from raising more capital and keeping profits within the business, especially during the COVID-19 pandemic. Lower debt levels help reduce the risk of financial trouble if loan repayments slow down. Fitch expects this trend to continue, with most NBFIs using their earnings to fund future growth rather than paying out large dividends. Despite slower global economic growth, India's NBFI sector continues to expand. The sector includes a wide variety of companies offering different types of loans. In cities, competition is tough for secured loans like home or car loans. But in rural areas, some NBFIs face less competition from banks. However, higher costs and greater credit risks in rural lending can affect profitability, depending on how well the loans are managed. Fitch also highlights that the type of loans an NBFI focuses on plays a big role in its success. Those with deep experience and large operations in specific segments tend to have more stable and sustainable businesses. Many NBFIs lend to non-prime customers -- people who may not get easy loans from banks -- which can help them earn higher margins, unless banks enter the same market. Large NBFIs benefit from their size and strong market position. They usually have better access to funding, more control over pricing, and lower costs. Those that lead in their lending areas are better able to manage risks and stay profitable, even during economic ups and downs. Companies backed by large corporate groups may also get easier access to funds and benefit from group support.
India Gazette
19-06-2025
- Business
- India Gazette
Big non-banking lenders in India are gaining trust and growing fast: Fitch Ratings
New Delhi [India], June 19 (ANI): India's non-bank financial institutions (NBFIs) are growing strongly, with large lenders leading the way, says Fitch Ratings. These institutions offer a wide range of financial services, and their credit ratings depend on how strong and stable their business models and finances are. According to Fitch, large NBFIs with a proven track record are earning more trust from investors and lenders. This growing confidence is helping them stay ahead of smaller players in the sector. By the end of September 2024, 17 major NBFIs tracked by Fitch had increased their share of the total loan market to 38 per cent, up from 30 per cent in March 2022. These leading lenders recorded an annual loan growth rate of 20 per cent during this period, much higher than the 9 per cent growth rate of the overall NBFI sector. These big NBFIs have also become financially stronger. Their debt-to-equity ratio -- a measure of how much they borrow compared to their own funds -- dropped from 4.5 times in 2021 to 4.3 times by mid-financial year 2025. This improvement came from raising more capital and keeping profits within the business, especially during the COVID-19 pandemic. Lower debt levels help reduce the risk of financial trouble if loan repayments slow down. Fitch expects this trend to continue, with most NBFIs using their earnings to fund future growth rather than paying out large dividends. Despite slower global economic growth, India's NBFI sector continues to expand. The sector includes a wide variety of companies offering different types of loans. In cities, competition is tough for secured loans like home or car loans. But in rural areas, some NBFIs face less competition from banks. However, higher costs and greater credit risks in rural lending can affect profitability, depending on how well the loans are managed. Fitch also highlights that the type of loans an NBFI focuses on plays a big role in its success. Those with deep experience and large operations in specific segments tend to have more stable and sustainable businesses. Many NBFIs lend to non-prime customers -- people who may not get easy loans from banks -- which can help them earn higher margins, unless banks enter the same market. Large NBFIs benefit from their size and strong market position. They usually have better access to funding, more control over pricing, and lower costs. Those that lead in their lending areas are better able to manage risks and stay profitable, even during economic ups and downs. Companies backed by large corporate groups may also get easier access to funds and benefit from group support. Fitch says that when it rates NBFIs, it looks at how stable their business is, how much risk they take, how strong their finances are, how easily they can raise money, and how well they follow rules. (ANI)
Hindustan Times
29-05-2025
- Business
- Hindustan Times
The changing contours of private credit
Despite a seemingly endless supply of and demand for private credit, the rapid expansion of the market has been a cause of concern for some regulators and executives. Should investors be worried? This brief explores certain aspects of private credit that warrant a close look—including the retailisation of the market and the current interest rate environment. It highlights the implications for financial stability, including the potential for finance to be rendered a disservice to the real economy. The financial cycle is never eradicated, nor is financial instability ever really extinguished. On the contrary, financial risk moves like liquid mercury out of certain entities and into others. And increasingly credit-fuelled economies are especially prone toward credit crises. In many ways, regulation can be backward-looking, and thus can often be directed toward the last crisis. Over 17 years since the Global Financial Crisis (GFC), regulators maintain a keen focus containing banking crises; justifiably so, as the recent banking wobbles in the United States (US) in March 2023—and those which rippled across the Atlantic—demonstrate that risks are still inherent (and perhaps contagious) within the global financial system. And yet, looking beyond the traditional banking system, potential vulnerabilities lurk within certain elements of the system of non-bank financial institutions (NBFIs). The late American economist, Hyman Minsky observed that strong medicine can have strong side effects. And one side effect of the regulation imposed upon globally systemic important banks (GSIBs) in the wake of the GFC has been for a swelling of assets under management (AUM) held by the NBFIs. As shown in Figure 1, since the GFC, the spread between the global AUM held by the shadow banks (NBFIs) and those held by the traditional banks has widened considerably. Accordingly, the Financial Stability Board (FSB) has been focused on 'strengthening the resilience' of the NBFIs on a global basis, given the lack of transparency and systemic stress testing within the industry. This paper can be accessed here. This paper is authored by Alexis A Crow, ORF, New Delhi.
