NBFCs’ credit growth at the aggregate level has accelerated since March 2025 and stood at 21.3 percent year-on-year (yoy) in September 2025 | Photo credit: Andrii Yalanskyi
“In the extreme scenario where the top three group borrowers in the default category are unable to repay, the system-level CRAR would decline by 243 basis points. Another eight NBFCs would witness a decline in CRAR below the statutory minimum of 15 per cent,” the RBI said in its latest Financial Stability Report (FSR).
The RBI assessed the resilience of the NBFC sector to liquidity shocks by estimating the impact of the assumed increase in cash outflows coupled with a decline in cash inflows. The results showed that the number of NBFCs that could face a negative cumulative liquidity mismatch of more than 20 percent in the coming year would be 3, 4 and 7 under the base, moderate and severe stress scenarios, respectively.
Core activity
Credit growth of NBFCs at the aggregate level has accelerated since March 2025 and stood at 21.3 percent year-on-year (yoy) in September 2025, mainly due to the conversion of two housing finance companies (HFCs) into upper tier NBFCs in March 2025 and June 2025, while credit growth of middle tier (ML) NBFCs continued to decline.
“Credit growth accelerated and asset quality improved across broad economic sectors (namely manufacturing, services and retail segments), except agriculture, where NBFCs have minimal exposure. Within the retail segment, microfinance/SHG loan growth has declined over the past two-and-a-half years,” the report said.
On the liquidity side, despite increased issuance of commercial paper (CP), top tier NBFCs improved their short-term debt to total assets ratio. Loan financing growth continued to outpace credit growth, while asset quality of NBFCs remained stable at March 2025 levels.
Published on December 31, 2025
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