The disbursements by non-banks–finance, and housing companies, is likely to decline by 50-60 per cent in the first quarter ended June 2021 amid restrictions imposed through lockdown to contain the spread of the Covid-19 pandemic. However, the sector is expected to post a healthy revival in the latter part of the year.

The sectoral Asset Under Management (AUM) growth is pegged at 7-9 per cent for FY2022, vis-a-vis four per cent in FY2021. The low base and increase in the disbursement of 6-8 per cent to support AUM growth. The pressure on asset quality would manifest as a 50-100 basis-point increase in non-performing assets (NPAs). The write-offs could remain higher and similar to the last fiscal in the base case scenario.

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The demand for restructuring would go up this fiscal because of prolonged stress in the operating environment and the non-availability of any blanket forbearance such as loan moratorium. In FY21, RBI had given a six-month suspension (March-August 2020). The restructuring in the last fiscal was about 1.5 per cent of the sectoral AUM.