The iMuthoot application enables the customers to have a ‘Do It Yourself Model’ where any user can quickly submit the application and complete the NPS registration all by themselves. Launched in 2012, Muthoot Finance is an authorized NPS service provider by the Pension Fund Regulatory and Development Authority (PFRDA).

"This follows significant clean-up of books by banks in recent years, as well as strengthened risk management and underwriting, which has led to higher preference for borrowers with better credit profiles. The steady improvement in corporate asset quality is clearly manifested in key indicators such as the credit quality of bank exposures," Assocham Secretary General Deepak Sood said.

In the private sector banking space, consolidation remained the flavour, with parent HDFC Ltd deciding to merge with HDFC Bank, and Axis Bank announcing the takeover of the retail portfolio of global giant Citibank. These two deals are expected to be completed in 2023.

Banks is the primary and dominant option for stable funding for mid-sized NBFCs. The increase in bank funding to non-banks is also because these entities have demonstrated a reasonably satisfactory performance during the COVID-19 period.

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The Reserve Bank of India's push for priority sector lending is accelerating with the PSL Certificates trading gaining traction at more than Rs. 6 lakh crores. This opens up new vistas of credit for the rural households as well as MSMEs through NBFCs and Housing Finance Companies.

"The government wants that banks proactively encourage traders to use this mechanism, and ensure their departments concerned are fully aware of the framework," said a senior executive of a bank who is aware of the development. According to the executive, banks have already had discussions with their counterparts from Russia, Cuba, Luxembourg, Sudan, and Tajikistan.

“While mid- & small-size NBFCs are majorly dependent on banks, banks also have selectively gained confidence in these NBFCs based on their performance during the pandemic and support shown by sponsors,” India Ratings said. “The agency expects the evolving funding ecosystem between banks and mid- & small-sized NBFCs is credit supportive.”

Indian banking system's outstanding credit to the services sector jumped by 21.3% year-on-year in November as compared to 3.2% a year ago, data released by the Reserve Bank of India showed on Friday.