India Ratings and Research on Thursday said the cost of funds for non-banking finance companies and housing finance companies could rise marginally over the medium term amid geopolitical tensions, uncertain macroeconomic conditions and the limited transmission of policy rate cuts by banks.
India Ratings and Research (Ind-Ra) said that despite recent policy rate cuts, borrowing costs are unlikely to soften meaningfully due to weak transmission, higher deposit competition and cautious capital markets.
It expects that changes in the funding mix, rather than liquidity stress, will define the sector’s dynamics.
In a statement, Ind-Ra said the expectation of a marginal increase in the cost of funds for non-banking finance companies (NBFCs) and housing finance companies (HFCs) over the near-to-medium term arises from wider spreads in bond markets due to geopolitical tensions, uncertain macroeconomic conditions and the limited transmission of policy rate cuts to bank lending rates.
The age​India Ratings and Research on Thursday said the cost of funds for non-banking finance companies and housing finance companies could rise marginally over the medium term amid geopolitical tensions, uncertain macroeconomic conditions and the limited transmission of policy rate cuts by banks.
India Ratings and Research (Ind-Ra) said that despite recent policy rate cuts, borrowing costs are unlikely to soften meaningfully due to weak transmission, higher deposit competition and cautious capital markets.
It expects that changes in the funding mix, rather than liquidity stress, will define the sector’s dynamics.
In a statement, Ind-Ra said the expectation of a marginal increase in the cost of funds for non-banking finance companies (NBFCs) and housing finance companies (HFCs) over the near-to-medium term arises from wider spreads in bond markets due to geopolitical tensions, uncertain macroeconomic conditions and the limited transmission of policy rate cuts to bank lending rates.
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