A challenging time awaits India’s financial sector: RBI
RBI predicts an increased risk of deterioration in asset quality and lower demand for loans
RBI had earlier introduced relaxation for bad loans
An attempt to protect lenders and creditors during the coronavirus pandemic
NBFCs may see a hit on their profitability due to asset quality concerns
Lower credit demand and the tendency to preserve cash will also add to the hit
With the lifting of relaxations, toxic loans may rise again
Concerns on non-performing assets remain
