Financing sector needs corrective reality check

The NBFC sector continues to struggle and access to ECB continues to remain their prime source of availing finance. FPI investments in this sector, especially through listed issuances for ease of end-use will continue to remain an attractive option.

Suspension of IBC and suspension of asset downgrade and NPA classification has continued to colour the reality of the actual stress in the financing sector. With the benefits of 'One Time Restructuring' falling away with the timeline for initiation being crossed, a corrective reality check is the need of the hour for the RBI and the financing sector.

The observation on strengthening the legal infrastructure for recovery, which works dehors resolution, is a step in the right direction. This would give certainty to financiers in ensuring that their money is safe, provided adequate credit checks are conducted and bells and whistles are adequately documented to check early warning signs.