New Delhi, Jan. 12 -- Asset quality of Non-Banking Financial Companies (NBFCs) is expected to deteriorate further due to business disruptions caused by the Covid-19 pandemic, especially in the industry sector, one of the major recipients of NBFC credit, according to the latest financial stability report (FSR) by the Reserve Bank of India (RBI).

According to the report, NBFCs saw a decline in growth in 2019-20, largely due to isolated credit events in a few large NBFCs, challenges in accessing funds and the overall economic slowdown, with the pandemic's impact adding to the stress in the later period. During 2019-20, credit extended by NBFCs grew by 4.4 per cent as compared with 22 per cent in 2018- 19.

''Gross NPAs of NBFCs increased fr...