No fear of NBFC crisis impacting growth as of now: Nirmal Jain, IIFL
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No fear of NBFC crisis impacting growth as of now: Nirmal Jain, IIFL

Things have since improved significantly and liquidity has eased. The short-term money market is also back. Interest rates are slightly higher but they have been trending down. The fear is easing for sure.
19 Nov, 2018, 11:05 IST | Mumbai, India
No fear of NBFC crisis impacting growth as of now: Nirmal Jain, IIFL

Things have since improved significantly and liquidity has eased,?Nirmal Jain,?Chairman,?IIFL, tells ET Now.?

Edited excerpts:

On problem with NBFCs

The major issue is a crisis of confidence. As you know, no NBFC has defaulted and no NBFC has been downgraded but a panic was created and liquidity also became tight because most of the corporate investors and mutual funds became wary of NBFCs.?

Things have since improved significantly and liquidity has eased. The short-term money market is also back. Interest rates are slightly higher but they have been trending down. The fear is easing for sure.?

On NBFC crisis & impact on growth?

Last year, NBFCs accounted for more than one-third of incremental credit. First, it is too early to say that growth has slowed down. The liquidity crisis has been very short lived and things are getting back to normal. In fact, the government and RBI have done a lot to ease liquidity. So, it is too early to conclude that growth has slowed down but maybe going forward, if this liquidity crisis or the scare of NBFCs remain for a longer term, then it will impact the flow of credit to SME consumers and that can impact growth. At this point in time, we do not fear that.?