Despite liquidity in banking system, it's still survival of the fittest
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Mumbai, April 1 -- Reserve bank of India may have infused Rs.3.75 lakh crore liquidity into the system, however bankers say there will still be flight to quality as they prefer highly rated borrowers, leaving the rest on their own.
Since the covid-19 pandemic is expected to increase business uncertainty, hitting prospective cash flows of companies, banks will look at the strength of the balance-sheet and past performance before funding these firms.
"Flight to quality will continue. Weaker NBFCs and other corporates will find it difficult to get funds. Earlier wholesale NBFCs found it difficult to get funding from banks. Now retail NBFCs which have riskier portfolio will struggle to get refinancing done," said Amitabh Choudhary, MD & CEO...
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