{"id":11006,"date":"2020-06-13T14:13:32","date_gmt":"2020-06-13T08:43:32","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=11006"},"modified":"2020-11-25T14:50:09","modified_gmt":"2020-11-25T09:20:09","slug":"effects-of-covid-19-on-nbfc-sector-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/","title":{"rendered":"Effects of COVID-19 on NBFC Sector in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">This article talks about the pre-coronavirus NBFC sector, the effects of COVID-19 on NBFC and the measures which can be taken by NBFCs in India to manage the <strong><a href=\"https:\/\/swaritadvisors.com\/learning\/coronavirus-outbreak-impact-on-the-indian-economy\/\" class=\"text-primary\">coronavirus impact on financial services<\/a><\/strong>. <\/p>\n\n\n\n<p>The\nCOVID-19 pandemic has severely affected global economies and has had a\nsignificant effect on the financial sectors worldwide, including the Indian\nfinancial sector. The wildfire spread of the coronavirus across the world and\nthe following lockdowns and travel advisories have resulted in grave cash flow\nissues for many business sectors in India, including the Non-Banking Financial\nCompany (NBFC) sector. The impact of COVID-19 on NBFC sector has created\nnumerous issues for the private lenders and other non-banking institutions in\nIndia. The problems faced by the NBFCs have resulted from the highly\nunpredictable market that has been created due to the halt in the Indian\neconomy. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a6200cd726\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a6200cd726\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Pre-Coronavirus_NBFC_Sector_in_India\" title=\"Pre-Coronavirus NBFC Sector in India\">Pre-Coronavirus NBFC Sector in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Effects_of_COVID-19_on_NBFC_Sector\" title=\"Effects of COVID-19 on NBFC Sector\">Effects of COVID-19 on NBFC Sector<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Restriction_on_Classification_of_NPA\" title=\"Restriction on Classification of NPA\">Restriction on Classification of NPA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Increase_in_Interest_Rates\" title=\"Increase in Interest Rates\">Increase in Interest Rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Repayment_of_Debts_by_NBFCs\" title=\"Repayment of Debts by NBFCs\">Repayment of Debts by NBFCs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Increase_in_NPAs\" title=\"Increase in NPAs\">Increase in NPAs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#The_slowdown_of_Loan_Disbursement\" title=\"The slowdown of Loan Disbursement\">The slowdown of Loan Disbursement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Reduction_in_NBFC_Valuation\" title=\"Reduction in NBFC Valuation\">Reduction in NBFC Valuation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Reduction_in_Revenue_Flow\" title=\"Reduction in Revenue Flow\">Reduction in Revenue Flow<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Decrease_in_Demand_for_Loans\" title=\"Decrease in Demand for Loans\">Decrease in Demand for Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#New_Regulations_and_Policies\" title=\"New Regulations and Policies\">New Regulations and Policies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Liquidity_Crunch\" title=\"Liquidity Crunch\">Liquidity Crunch<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Business_Model_Failure\" title=\"Business Model Failure\">Business Model Failure<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Overcoming_the_Effects_of_COVID-19_on_NBFC_Sector\" title=\"Overcoming the Effects of COVID-19 on NBFC Sector\">Overcoming the Effects of COVID-19 on NBFC Sector<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Innovation\" title=\"Innovation\">Innovation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Operational_and_Risk_Management\" title=\"Operational and Risk Management\">Operational and Risk Management<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#Connect_with_Customers\" title=\"Connect with Customers\">Connect with Customers<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/swaritadvisors.com\/learning\/effects-of-covid-19-on-nbfc-sector-in-india\/#In_Conclusion\" title=\"In Conclusion\">In Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pre-Coronavirus_NBFC_Sector_in_India\"><\/span>Pre-Coronavirus NBFC Sector in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>India has emerged as one of the fastest developing economies in the world. The recent growth trends in the Indian economy have proven India\u2019s grit to renovate its industries, including the financial industry of the country. The advent of Non-Banking Financial Companies \u2013 <strong><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\" class=\"text-primary\">NBFC in India<\/a><\/strong> has had revolutionary effects on monetary transactions undertaken by businesses as well as individuals. <\/p>\n\n\n\n<p>NBFCs in India redesigned several financial processes, streamlined financial\nsolutions for the masses and reached out to a large market of individuals and\nenterprises which were yet to receive proper financial assistance.<\/p>\n\n\n\n<p>NBFC entities proved to be the <strong>right partner for the Indian banks <\/strong>through their ability to serve an enormous unserved market that had been waiting for financial services and was unreachable by banking organisations. NBFCs leveraged technology-focused<strong> their services to a niche market <\/strong>and extended quality loan products.<\/p>\n\n\n\n<p>In the pre-COVID-19 era, NBFCs in India were emerging as the new-age\nfinancial institutions with the ability to provide customised financial\nassistance to the masses. NBFCs targeted those geographical locations, where\nbanks were unable to provide their services. <\/p>\n\n\n\n<p>Indian NBFCs were also able to create a large market for themselves in\nthe form of small and medium enterprises, low-income earning individuals and\nself-employed professionals. This market was unable to avail banking services\ndue to their limited credit history or a lack thereof. <\/p>\n\n\n\n<p>Additionally, NBFCs in India before the coronavirus age were a source of\nconstant credit flow and revenue generation in the economy. The sector was\nfavoured by the masses for their financial needs due to the flexible and more\napproachable services offered by NBFCs.<\/p>\n\n\n\n<div class=\"shadow6\">However, the coronavirus pandemic has had an intense effect on the\nfinancial sector in India. Just like various other leading industries of the\ncountry, the effects of COVID-19 on NBFC sector has raised many questions and\nproblems for the non-banking financial companies in India. Let\u2019s have a look at\nthe COVID-19 impact on NBFCs:<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Effects_of_COVID-19_on_NBFC_Sector\"><\/span>Effects of COVID-19 on NBFC Sector<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The current global crisis of COVID-19 has created an\narray of problems for all kinds of businesses. The novel coronavirus has posed\nvarious challenges to the NBFC sector, which was recovering from the liquidity\ncrisis in India. The numerous effects of COVID-19 on NBFC sector in India can\nbe summarised as follows: <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Restriction_on_Classification_of_NPA\"><\/span>Restriction on Classification of NPA<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As per the RBI directions for providing relief to borrowers in India, a moratorium till June 30, 2020, has been applied on the repayment of loans extended by banks as well as NBFCs. As a large number of borrowers may suffer from lack of disposable income and sufficient liquidity during the lockdown, the Reserve Bank of India on March 27 allowed banks and NBFCs to offer a three-month moratorium on term loans and credit card bills. This was a major step to provide relief to borrowers and avoid a financial crash. <\/p>\n\n\n\n<p>However, this has had a severe reaction on the Indian\neconomy as this has reduced the cash flow in the market, allowing borrowers to\nrepay their credit at a later date. Though the moratorium is only a temporary\nresort and not a waiver to credit, there are high chances of such loans turning\ninto NPAs of banking and NBFC institutions.<\/p>\n\n\n\n<p>The moratorium has not only affected the loan\nrepayments which were supposed to be received by NBFCs during this period but\nhas also restricted NBFCs from classifying any accounts of defaulting borrowers\nas Non-Performing Assets (NPA). <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Increase_in_Interest_Rates\"><\/span>Increase in Interest Rates<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The CIBIL score of the individuals who have obtained loans will remain unaffected as the non-payment of interest will not be seen as default during these three months. Nevertheless, at the end of the moratorium, the interest can be seen a bit high, particularly for personal loans and credit cards. Additional interest will have to be paid for deferring equated monthly instalment (EMIs)to the respective lenders. It may turn out to be a difficult task for NBFCs to assess delinquencies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Repayment_of_Debts_by_NBFCs\"><\/span>Repayment of Debts by NBFCs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>NBFCs have a continuous liability to repay their\nprincipal and interest amount due on the NCDs even during the moratorium\nperiod. Contrary to banks, NBFCs cannot accept deposits from the public payable\non demand. A majority of NBFCs rely on banks and other debt capital sources to\nreceive funds for their onward lending activities. <\/p>\n\n\n\n<p>The moratorium extended to borrowers of such NBFCs has\nled to a direct inability of NBFCs to repay their own debts which are not\naffected by the moratorium. In case of defaults arising out of such inability,\nthe chances of systematic defaults have increased across the NBFC sector in\nIndia.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Increase_in_NPAs\"><\/span>Increase in NPAs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>With the moratorium in force and a slowed-down economy, the NBFC players are set to face an increasing number of Non-Performing Assets (NPAs). Additionally, with the suspension of new bankruptcy cases under the <strong>Insolvency and Bankruptcy Code<\/strong> (IBC) and an increased threshold for insolvency petitions with the NCLT, the woes of NBFCs to handle such NPAs are set to multiply.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_slowdown_of_Loan_Disbursement\"><\/span>The slowdown of Loan Disbursement<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>With a moratorium on loan repayments from the\nborrowers of NBFC entities, there are high chances of an increase in the\nNon-Performing Assets of the NBFC in the near future. This would also lead to a\nslowdown in the loan disbursements by NBFCs, and thereby affect the GDP of the\ncountry.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reduction_in_NBFC_Valuation\"><\/span>Reduction in NBFC Valuation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The stock market in India has become highly volatile after the COVID-19 pandemic and subsequent lockdowns. The crash in the stock market has led to many businesses losing their value, including many NBFCs in India. The NBFC sector has witnessed a reduction in the NBFC valuation by 30-50% on an average in a month.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reduction_in_Revenue_Flow\"><\/span>Reduction in Revenue Flow<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The coronavirus pandemic has resulted in mass lay-offs\nand salary cuts. This has reduced the average disposable income of the\nconsumers, further leading to a reduction in their financial transactions. This\nincludes loan repayments, which has severely impacted the revenue flow of the\nNBFCs operating at different levels. Many NBFCs are suffering from zero\nprofitability and lack of revenue for their daily activities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Decrease_in_Demand_for_Loans\"><\/span>Decrease in Demand for Loans<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The primary market segmentation of NBFCs is the small and medium businesses and income-earning individuals that belong to the lower and middle-income groups. Since most small businesses have been restricted from operating across India, and individuals are confined to their homes with limited financial resources, there has been a sharp decrease in the demand for loans in India. Additionally, the decrease in demand for loans has also had an impact on the economy, resulting in a major slowdown of the fiscal development of the country.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"New_Regulations_and_Policies\"><\/span>New Regulations and Policies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The new regulations and policies introduced by the\nIndian government to handle the effects of COVID-19 on NBFC sector may prove to\nbe overwhelming for non-banking financial companies. This may not only affect\nthe overall productivity and efficiency but also reduce the profitability of\nthe financial institutions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Liquidity_Crunch\"><\/span>Liquidity Crunch<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Non-banking financial companies are finding it difficult day by day to raise capital from the market and maintain the required amount of liquidity for their operations. The primary reason for this crunch is the lack of interest of investors to put their money in certain sectors. This requires NBFCs to face the challenge of liquidity crunch by the smart implementation of liquidity risk management policies. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Business_Model_Failure\"><\/span>Business Model Failure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>While\na large number of NBFCs operate as a hybrid or digital business, there are many\nNBFCs in India which still rely on traditional methods of operations and extend\ntheir financial services manually. Such companies are facing hassles in\nexecuting their financial operations due to lack of connectivity with their\ncustomers. Lack of digital existence is also preventing many NBFCs from\ncollecting EMIs and redressing the issues faced by their customers. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overcoming_the_Effects_of_COVID-19_on_NBFC_Sector\"><\/span>Overcoming the Effects of COVID-19 on NBFC Sector<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>With\nthe coronavirus pandemic putting the world to a standstill, businesses have no choice\nbut to adapt to the changing market scenarios and inculcate strategies to stay\nafloat during the lockdown and the aftermath of the COVID-19.<\/p>\n\n\n\n<p>When\nit comes to Non-Banking Financial Institutions, they also need to pro-actively\nmanage their activities and revamp their operations in accordance with the\nevolving market circumstances. While the RBI and the Indian government are\nproviding numerous reliefs and fiscal relaxations to the NBFC sector, NBFCs\nneed to rethink their own operational strategies in order to survive and thrive\nuntil the market stabilises and the market achieves normalcy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Innovation\"><\/span>Innovation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>NBFCs need to bring innovation in their operations by introducing smarter technologies and customisable products in the mix. NBFCs need to expand their market reach to access a larger market base digitally in order to maintain their financial health and operational efficiency. NBFCs which are able to achieve this would be able to grow effortlessly once the effects of <strong>COVID-19 on NBFC<\/strong> sector are minimalised.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Operational_and_Risk_Management\"><\/span>Operational and Risk Management<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>NBFCs\nalso need to reconsider their short-term and long-term operational goals to\npinpoint the areas which need revision. They also need to build a strong risk\nmanagement strategy to deal with risks relating to their operations, liquidity,\ntechnology, credit, human resources and market.<\/p>\n\n\n\n<p>NBFCs\nhave various opportunities to support the suffering market and restart their\noperations to the full speed once the market return to its stability. However,\nthis can only be possible if the NBFCs are ready to adapt to these changing and\nunprecedented times. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Connect_with_Customers\"><\/span>Connect with Customers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The best option for NBFCs is to bounce back digitally by connecting with their customers via different digital channels of communication. Customer relationship and trust-building is the key to survive and retain the customer base after the pandemic is over.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_Conclusion\"><\/span>In Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The RBI and the Government of India have taken\nnumerous steps in an endeavour to boost liquidity and to deal with the effects\nof COVID-19 on NBFC sector. The various measures taken by the Authorities\ninclude reduction of the repo rate, relaxation of the regulatory requirements, Targeted\nLong-Term Repo Operation (TLTRO) and\nmuch more.&nbsp; <\/p>\n\n\n\n<p>However, the increasing number of bad loan cases,\npayment deferrals, passive loan development and slow economy have hindered the\ngrowth of the NBFC sector. The NBFC players in India are struggling to maintain\ntheir financial health during the coronavirus pandemic. The slowing of GDP\ngrowth, disruption of supply chains, and reduction in buyers\u2019 disposable income\nhave further affected NBFCs during the novel coronavirus pandemic. <\/p>\n\n\n\n<p>In the current scenario, the NBFCs are, therefore,\nrequired to prepare a contingency plan and revise their operational strategies\nto stay afloat during the pandemic and after the slowdown of the outbreak.\nNBFCs need proper planning to identify their weak points and work on them by\ninculcating new ideas and risk mitigation techniques. <\/p>\n\n\n\n<p>NBFCs in India need to find the best ways to sustain\ntheir liquidity and avoid any expansion of their balance sheets until the\nmarket conditions are back to normal. This also includes maintaining business\ncontinuity; staying constantly connected with customers; ensuring productivity\nof remote employees; complying with the legal and regulatory requirements;\nenhancing risk management strategies to deal with market risks, operational\nrisks, liquidity risks, etc.; and move towards digital transformation.<\/p>\n\n\n\n<div class=\"shadow4\">NBFCs must also look for external support from NBFC\nexperts who can assist it with risk management and planning, NBFC compliance\nand overall business management to outrun the effects of COVID-19 on NBFC\nsector. Swarit Advisors has a team of seasoned NBFC experts in India who can\nhelp you with your NBFC business management. Consult Swarit Advisors for your\nNBFC registration, NBFC collaborations, NBFC Sale and NBFC Compliance in India.<\/div>\n\n\n\n<p class=\"text-left\"><b>Also, Read<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/a-peek-into-the-future-of-nbfcs-in-india\/\">A Peek into the Future of NBFCs in India<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article talks about the pre-coronavirus NBFC sector, the effects of COVID-19 on NBFC and the measures which can be taken by NBFCs in India to manage the coronavirus impact on financial services. The COVID-19 pandemic has severely affected global economies and has had a significant effect on the financial sectors worldwide, including the Indian [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":11007,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[89,544],"tags":[948],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/11006"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=11006"}],"version-history":[{"count":9,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/11006\/revisions"}],"predecessor-version":[{"id":16693,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/11006\/revisions\/16693"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/11007"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=11006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=11006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=11006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}