Industry Comment

NBFC

ICRA Management Consulting Services Limited

IMaCS Research & Analytics

NON-BANKING FINANCIAL COMPANIES

January 2013

Industry Comment

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Industry Comment

NBFC

Contacts:
Vineet Nigam
Principal
E-mail: vineet.nigam@imacs.in
Telephone: +91 120 4515800

Disclaimer
All information contained in this document has been obtained by IMaCS from sources believed
by it to be accurate and reliable. Although reasonable care has been taken to ensure that the
information herein is true, such information is provided as is without any warranty of any kind,
and IMaCS in particular, makes no representation or warranty, express or implied, as to the
accuracy, timeliness or completeness of any such information. All information contained herein
must be construed solely as statements of opinion, and IMaCS shall not be liable for any losses
incurred by users from any use of this document or its contents in any manner. Opinions
expressed in this document are not the opinions of our holding company, ICRA Limited (ICRA),
and should not be construed as any indication of credit rating or grading of ICRA for any
instruments that have been issued or are to be issued by any entity.

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Industry Comment

NBFC

TABLE OF CONTENTS
ENVIRONMENT ANALYSIS - PORTERS MODEL ..........................................................................4
LIBERALISATION AND SUBSEQUENT DEVELOPMENTS ...............................................................5
STRUCTURE OF THE INDUSTRY............................................................................................... 10
KEY ISSUES FACING THE PLAYERS........................................................................................... 14
HIGH DEGREE OF COMPETITION......................................................................................................... 14
SLOWDOWN IN GROWTH.................................................................................................................. 17
POLICY REFORMS ............................................................................................................................ 18
COMPETITION FROM SCBS................................................................................................................ 22
DEPOSITOR PROTECTION .................................................................................................................. 26
OPERATING TRENDS .............................................................................................................. 27
BUSINESS PROFILE ........................................................................................................................... 27
TYPE-WISE PROFILE OF THE NBFC SECTOR .......................................................................................... 27
REGION-WISE CONCENTRATION OF NBFCS ......................................................................................... 28
ASSET PROFILE ................................................................................................................................ 28
ASSET PROFILE OF RNBCS ................................................................................................................ 29
PUBLIC DEPOSITS (PDS) PROFILE ....................................................................................................... 29
REGION-WISE PROFILE OF PDS .......................................................................................................... 29
MATURITY PATTERN OF PDS (EXCL. RNBCS) ....................................................................................... 30
INTEREST RATE PATTERN OF PDS (EXCL. RNBCS) ................................................................................. 30
BORROWING PROFILE (EXCL. RNBCS)................................................................................................. 30
INDUSTRY CONCENTRATION BY ASSETS (EXCL. RNBCS).......................................................................... 31
INDUSTRY CONCENTRATION BY DEPOSITS (EXCL. RNBCS) ...................................................................... 31
INDUSTRY CONCENTRATION BY NOF (EXCL. RNBCS) ............................................................................ 31
NPAS OF NBFCS (EXCLUDING RNBCS) ............................................................................................... 32
DEMAND SUPPLY POSITION................................................................................................... 32
LIABILITIES PROFILE.......................................................................................................................... 32
LENDING PROFILE ............................................................................................................................ 36
REVIEW OF FINANCIAL PERFORMANCE .................................................................................. 36
OUTLOOK.............................................................................................................................. 43
RECOMMENDATIONS OF THE WORKING GROUP (CHAIRPERSON USHA THORAT) ........................................ 45
GUIDELINES ON FAIR PRACTICES CODE FOR NBFCS................................................................. 46

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