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NBFC debentures plummet: Here are a few lessons for investors

Updated : February 21, 2019 01:20 PM IST

The problems with NBFC bond instruments have been around for the last few months. The asset liability mismatch is the chief culprit behind this.
NBFCs have raised short-term money by way of commercial papers and short-term loans from banks to lend for long-term, which includes home loans. Once the short-term funding stops, the NBFCs are squeezed.
On the one hand, they have to repay the short-term loans and commercial papers and on the other, their customers pay as per the repayment schedule over an extended period of time.
NBFC debentures plummet: Here are a few lessons for investors
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