Lok Sabha Question No. 1457 (UNSTARRED), answered on 2019-07-01
Subject: NPAs of NBFCs
Ministry: FINANCE
Asked by: Heena Vijaykumar Gavit, Supriya Sadanand Sule, Amol Ramsing Kolhe, Subhash Ramrao Bhamre, Kuldeep Rai Sharma, Sunil Dattatray Tatkare

1457:

## GOVERNMENT  OF INDIA

## MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO: 1457 TO BE ANSWERED ON THE 1 st  JULY, 2019/ASHADHA 10, 1941  (SAKA)

## NPAs of NBFCs

DR. HEENA GAVIT:

SHRIMATI SUPRIYA  SULE:

DR. AMOL RAMSING  KOLHE:

DR. SUBHASH  RAMRAO  BHAMRE:

SHRI KULDEEP RAI SHARMA:

SHRI SUNIL DATTATRAY  TATKARE:

## Will  the Minister  of FINANCE  be pleased to state:

- (a) the number of Non-Banking Finance Companies (NBFCs) and Housing Finance Companies  functioning  in the country,  State/UT-wise;
- (c) whether  the NBFC  and Housing  Finance  Companies  are facing an asset liability mismatch as well  as funding  issues resulting  in financial  crisis  and if so, the details  thereof  and the reasons therefor;
- (b) the details  of Non-Performing  Assets (NPAs)  of NBFC  during  the last three  years  and the current  year;
- (d) whether  the Government  has conducted  any  enquiry  recently  in this regard  and if so, the details  thereof  and the outcome  thereof;  and
- (e) the  action taken/being   taken   by   the  Government   to  help   the  NBFC's   to  overcome   the financial  crisis?

## ANSWER

FINANCE  MINISTER

## To be answered by

## (S mt. Nirmala  Sitharaman)

- (b): As per RBI data,  gross Non-Performing  Assets (NPA)  ratio  of NBFCs  (Deposit-taking  and Systemically Important  Non-deposit-taking NBFCs)  during  the last four financial  years  are as under:
- (a): As on June  23, 2019, as per Reserve  Bank  of India (RBI) data,  9,643 NBFCs  were  registered with  RBI. The number  of registered  NBFCs  under  various  Regional  Offices of RBI, along  with details  of the States and Union  Territories  over which  each Regional  Office has jurisdiction, is at  Annex   1.  As  on  June 24,  2019,  as  per  National   Housing   Bank (NHB)   data,   101  Housing Finance  Companies  (HFCs)  were  registered  with  NHB.  The State-wise  and Union  Territorywise number  of HFCs  registered  is at Annex  2.
- (c):  RBI  has  informed   that   it  is  closely   monitoring the  problem   of  liquidity being faced  by certain   NBFCs,   mainly   due  to  asset-liability mismatches   and  the  overall   liquidity position   of

| Financial year   | Gross NPAratio   |
|------------------|------------------|
| 2015-16          | 3.9%             |
| 2016-17          | 6.1%             |
| 2017-18          | 5.3%             |
| 2018-19          | 6.6%             |

NBFCs.  NHB has informed  that,  as part of due diligence,  it is continuously monitoring   the liquidity position  of 15 major HFCs.

(e): NBFCs  are regulated  and supervised  by  RBI as per powers  vested in it under  the provisions contained   in  Chapter   IIIB  of  the  Reserve   Bank of  India  Act,   1934.  As  per  RBI  inputs,   a number   of  measures   were   undertaken   to  ameliorate   liquidity issues  faced  by   NBFCs.   The measures  taken  include, inter alia , the following:

(d): With  regard  to whether  Government  has conducted  any  enquiry  recently,  the Ministry of Corporate  Affairs  has informed  that  the Registrar  of Companies,  Kerala conducted  an inquiry of  an  NBFC   under section 206(1)  of  the  Companies   Act,   2013,  which   brought   out  noncompliance  of certain  provisions  of the Companies  Act,  2013 but no reporting  on defaults  in repayment/redemption of debentures  were  observed.  The Ministry has further  informed  that the  Serious   Fraud   Investigation   Office (SFIO)  has  been  ordered   to  conduct   investigation in respect of an infrastructure-related NBFC.

- (i) Open market  operations  were  conducted,  in addition  to regular   Liquidity Adjustment Facility  auctions,  to inject  liquidity in financial  markets.
- (iii) The single-borrower  exposure limit  for NBFCs  that  do not finance  infrastructure was increased  from  10 percent  to 15 percent  of capital  funds,  up to  31 st  March 2019.
- (ii) RBI permitted   special   dispensation   to  banks   up until   31 st March 2019,  whereby   their incremental  credit  to NBFCs  and HFCs  after October  19, 2018, could  be treated  as high quality  liquid  assets for calculation  of Liquidity Coverage  Ratios.
- (iv) Banks were  permitted  to provide  partial  credit  enhancement  for non-deposit  accepting systemically-important NBFCs  registered  with  RBI and HFCs  registered  with  NHB  as per guidelines.
- (vi) To encourage   NBFCs   to  securitise/assign   their   eligible   assets,  the  Minimum Holding Period  requirement  for originating NBFCs  was relaxed  till  December  2019.
- (v) RBI  reduced   the  minimum   average   maturity requirement   for  External   Commercial Borrowings  in the infrastructure space  raised by   eligible   borrowers   from   five  years   to three  years.
- (vii) NBFCs were provided  regulatory  concessions to  enable  restructuring  of MSME loans.
- (viii) NBFCs with  assets over Rs. 5,000 crore  have been asked to appoint  a Chief  Risk  Officer to improve  the standards  of risk  management.

## Lok Sabha Unstarred  Parliament  Question  No. 1457,  for  1.7.2019 Number of registered NBFCs under Regional Offices of RBI

## Annex-1

| gional Office(jurisdictionoverState/ Unionterritory(UT))          | NumberofregisteredNBFCs as   |
|-------------------------------------------------------------------|------------------------------|
| jarat,andUTsof DamanandDiu,DadraandNagarHaveli)                   |                              |
| ataka)                                                            |                              |
| Pradeshand Chhattisgarh)                                          |                              |
| disha)                                                            |                              |
| ,WestBengalandUTof AndamanandNicobarIslands)                      |                              |
| achalPradesh,PunjabandUTof Chandigarh)                            |                              |
| aduandUTof Puducherry)                                            |                              |
| yanaandNCTDelhi)                                                  |                              |
| achalPradesh,Assam,Manipur,Meghalaya,Mizoram,Nagalandand Tripura) |                              |
| hraPradeshand Telangana)                                          |                              |
| )                                                                 |                              |
| ndKashmir)                                                        |                              |
| adeshand Uttarakhand)                                             |                              |
| ashtraand Goa)                                                    |                              |
| Jharkhand)                                                        |                              |
| uram (KeralaandUTof Lakshadweep)                                  |                              |

Source: RBI

Lok Sabha Unstarred  Parliament  Question  No. 1457,  for  1.7.2019 Number of registered Housing Finance Companies (HFCs) under NHB

| State/Unionterritory   |   NumberofHFCs |
|------------------------|----------------|
| AndhraPradesh          |              1 |
| Delhi                  |             19 |
| Gujarat                |              5 |
| Haryana                |              3 |
| Karnataka              |              5 |
| Kerala                 |              2 |
| MadhyaPradesh          |              1 |
| Maharashtra            |             40 |
| Manipur                |              1 |
| Mizoram                |              1 |
| Rajasthan              |              6 |
| Tamil Nadu             |             15 |
| WestBengal             |              2 |
| Total                  |            101 |

Source: National Housing Bank

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