A new report from Crisil Ratings suggests that Non-Banking Finance Companies (NBFCs) are set to increase their reliance on bank borrowings in FY27. The share of bank loans in their overall resource mix is expected to climb to 45% by the end of the fiscal year, up from 43% in FY26.
Why the Shift?
The move is primarily driven by a widening gap between bank lending rates and debt capital market costs:
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Cost Advantage: Bank lending rates have continued to decline, while bond yields have remained elevated due to a volatile macroeconomic environment.
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Capital Market Hesitation: Corporate bond interest rates are currently higher than bank lending rates, making new bond issuances less attractive.
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Global Uncertainty: Geopolitical tensions and exchange rate volatility have made External Commercial Borrowings (ECBs) muted in the near term.
The “Two Halves” of FY26
The rating agency noted that the previous fiscal year (FY26) was a story of two divergent trends:
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H1 FY26: Reliance on capital market instruments (bonds) rose as yields initially fell.
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H2 FY26: Preference shifted sharply back to bank loans as bond yields reversed and bank rates continued to drop.
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Bond Issuances: Dropped from ₹2.1 lakh crore in H1 to ₹1.4 lakh crore in H2.
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Bank Lending: Saw a net increase of ₹2.5 lakh crore in the second half of the year.
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Alternative Funding: Securitisation
To mitigate high bond yields and global uncertainty, Crisil expects securitisation (the process of pooling assets like loans and selling them as consolidated financial instruments) to provide critical support for NBFCs looking to raise resources without over-leveraging one single source.
Expert Take: “Diversification of the resource mix remains crucial,” noted Crisil Director Malvika Bhotika. For NBFCs to support their growth plans at an optimal cost, they must balance bank loans with other instruments to avoid being overly exposed to a single lending channel.
Midday Market Pulse (April 15, 2026)
While NBFCs plan their long-term borrowing, the broader financial sector is seeing high activity today:
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HDFC Bank: Up 2.07%
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SBI: Up 0.93%
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Yes Bank: Up 2.55%
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IRFC: Up 2.87%
