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DBS sees subdued sentiments in credit markets

RBI wants Chief Risk Officers at NBFCs


RBI wants Chief Risk Officers at NBFCs



Subdued sentiments in the domestic credit markets is likely to take precedence for the Reserve Bank of India (RBI), said Singapore’s DBS Group in comments on India in its daily market report on 23 May 2019.

A rating downgrade and resultant surge in bond yields of a non-bank mortgage lender fuelled worries over the creditworthiness of weaker players in the sector, according to the report by DBS Group Research.

“Respite is not in the offing as the RBI (Reserve Bank of India) dismissed the need for a dedicated credit line to struggling entities, where problems are seen as solvency driven, rather than due to a shortage of liquidity,” said the duo in the report.

Separately, Non-Banking Financial Companies (NBFCs) with more than Rs.50 billion in assets had been asked to appoint a Chief Risk Officer to tighten risk management plans.

“Concurrently, a new operational framework is in the works for non-banks to improve on their asset-liability mix.

“Focus is also on the RBI’s revised circular to replace the February 2018 version, which had placed stringent course-correction steps for banks to deal with stressed assets,” said the report.

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