Published Paper Details:

Abstract Non-Banking Financial Company (NBFC) manages one-fifth of the credit for the Indian economy and gets recognized as a crucial sector among all other sectors. NBFCs are playing an increasingly important part in the economy. Their share of credit has increased because they were lending in sectors where banks refused to go or did not want to go. The used commercial market is a good example here. Now that NBFCs are finding it difficult to raise money, this will choke the flow of credit to the economy. This has impacted many sectors which were already suffering from the twin blows of demonetisation and the goods and services tax. A reduction in flow of credit further added to economic slowdown pressures. Besides, a slowdown in credit which lead to another pile of non-performing assets (NPA) in sectors such as commercial real estate and infrastructure, which had a economy-wide knockdown effects. The flurry of recent downgrades in NBFCs, housing finance companies and infrastructure projects lead to a crisis in the year 2019. With this backdrop, this research aims to (i) uncover the rationale behind the NBFCs crisis 2019 and (ii) highlight the steps taken by RBI to overcome the situation.