India NBFC sector balance sheet to hit ₹92.9 trillion by FY28: Brickwork
Synopsis
India's NBFC sector is on track to nearly double its balance sheet to ₹92.9 trillion by FY28, with credit growth already running at 19.4% in FY25 — nearly double that of scheduled commercial banks. But Brickwork Ratings flags a split picture: headline growth masking rising stress in unsecured and rural credit, just as regulators tighten the screws.
Key Takeaways
India's NBFC sector total balance sheet is projected to reach ₹92.9 trillion by FY28 , up from ₹61.1 trillion in FY25 .
NBFC credit grew 19.4 per cent YoY in FY25 , outpacing scheduled commercial banks' growth of 11.5 per cent .
Credit expansion is forecast at around 16 per cent between FY26 and FY28 .
Gross NPAs improved from 3.5 per cent in FY24 to 2.9 per cent in FY25 ; net NPAs held near 1 per cent .
Brickwork Ratings flags rising stress in unsecured and rural credit as a key near-term risk entering FY27 .
India's non-banking financial company (NBFC) sector is projected to see its total balance sheet expand to ₹92.9 trillion by FY28, growing at nearly 15 per cent annually, according to a report released on Friday, 12 June by ratings agency Brickwork Ratings. The sector's total assets stood at ₹61.1 trillion in FY25, underpinned by strong loan demand across retail, MSME, and services segments.
Credit Growth Outpacing Banks
NBFC credit growth hit 19.4 per cent year-on-year in FY25, significantly outpacing scheduled commercial banks' (SCBs) growth of 11.5 per cent over the same period. The sector is expected to sustain an expansion of around 16 per cent between FY26 and FY28, according to the Brickwork Ratings report.
This trajectory signals deepening financial inclusion but also heightened household and SME leverage. 'It boosts NBFCs' systemic role and bank or mutual fund linkages, while amplifying credit cycle risks and liquidity vulnerabilities, prompting demands for stricter prudential norms and disclosures,' the report noted.
Stable Outlook, But Stress Emerging in Pockets
Hemant Sagare, Director of Ratings at Brickwork Ratings, said the sector 'maintains a stable outlook, supported by moderated but resilient credit growth, improving asset quality, and ongoing digital integration.' However, he cautioned that 'the sector enters FY27 with widening performance gaps as strong headline growth contrasts with rising stress in unsecured and rural credit.'
Sagare further noted that elevated funding costs, geopolitical spillovers, and tighter regulations are reshaping risk profiles across the sector. NBFCs with stronger digital risk systems and better regulatory alignment are considered better positioned to sustain credit stability through the year.
Asset Quality Improves, NPA Ratios Decline
On the asset quality front, the report points to meaningful improvement. Gross non-performing assets (GNPAs) declined from 3.5 per cent in FY24 to 2.9 per cent in FY25, while net NPAs held steady at around 1 per cent, supported by broad-based gains and lower slippages.
In the near term, asset quality is expected to remain broadly stable, shaped by household cash flows, MSME earnings, and leverage trends. Capital buffers and prudent provisioning are seen as key containment factors for fresh slippages.
Long-Term Outlook Hinges on Governance and Discipline
Over the longer horizon, NPA trends will depend on disciplined credit expansion, stronger governance frameworks, a shift toward secured lending, and robust monitoring systems, the report forecasted. This comes amid the Reserve Bank of India's (RBI) ongoing push for tighter oversight of large NBFCs, particularly those with significant retail and unsecured lending books.
With the sector's systemic footprint growing rapidly, the coming three years will test whether India's NBFCs can scale without repeating the asset quality cycles that periodically strained the sector in the past decade.
Point of View
Yet the Brickwork report's own language about 'widening performance gaps' and stress in unsecured and rural books suggests the aggregate numbers are flattering. India has been here before: rapid NBFC expansion followed by a liquidity or asset-quality shock. The question is whether digital risk systems and tighter RBI oversight can break that cycle, or whether the sector is again building a cliff it will eventually fall off.
NationPress
9 Aug 2026
Frequently Asked Questions
What is the projected size of India's NBFC sector balance sheet by FY28?
India's NBFC sector total balance sheet is projected to reach ₹92.9 trillion by FY28, growing at nearly 15 per cent annually. This compares with total assets of ₹61.1 trillion recorded in FY25, according to a Brickwork Ratings report.
How does NBFC credit growth compare with banks?
NBFC credit grew at 19.4 per cent year-on-year in FY25, significantly outpacing scheduled commercial banks' growth of 11.5 per cent over the same period. The sector is expected to sustain around 16 per cent growth between FY26 and FY28.
Has NBFC asset quality improved recently?
Yes. Gross non-performing assets fell from 3.5 per cent in FY24 to 2.9 per cent in FY25, while net NPAs remained stable at around 1 per cent. Brickwork Ratings attributes this to broad-based gains and lower slippages.
What are the key risks facing the NBFC sector?
Brickwork Ratings highlights rising stress in unsecured and rural credit, elevated funding costs, geopolitical spillovers, and tighter regulations as the primary near-term risks. NBFCs with stronger digital risk systems and regulatory alignment are seen as better placed to navigate these pressures.
Which segments are driving NBFC loan demand?
Loan demand is being driven primarily by retail, micro, small, and medium enterprises (MSME), and services segments, according to the Brickwork Ratings report. These segments have been the key contributors to the sector's robust credit expansion in FY25.
