While growth will be broad-based across various sub-sectors, microfinance and personal loans will be leading the growth chart. On the other hand, vehicle financing loans (commercial vehicle finance, passenger vehicle finance), which has remained significantly subdued since FY20, are also expected to report higher growth numbers, following an improvement in the operating environment.

This translates into Rs 36,418 crore on gross non-performing assets, an all-time high. This is despite significant write-off of very sticky loans by lenders as a balance sheet cleaning tool.

According to the MFIN Micrometer Q2 FY2022-23 report, the country's microfinance loan portfolio stood at over Rs 3 lakh crore at end-September 2022, serving 6.2 crore unique borrowers with 12 crore loan accounts.

Earlier this month NARCL had matched Gujarat-based NBFC Raj Radhe Finance's ₹130 crore challenge to its ₹100 crore offer to take over the ₹2,623 crore outstanding dues of the company, ET reported in its December 5 edition. It is now learnt that the offer is on a full cash basis.

The planned e-auction for RCL, as approved by the committee of creditors (CoC), is scheduled to be held on December 21, and the exit of the highest bidder on the eve of the auction has come as a big jolt to the lenders.

"The company is unable to service its obligations in respect of the interest on Non-Convertible Debentures due on December 19, 2022," it said.

Neobank partnerships driving hyper-personalised financial products, AI-driven efficiency in digital lending services and wealth tech for everyone. These three trends will enable fintech innovation in India and retain its position as the global fintech leader in 2023.

Reliance Capital is the third large NBFC against which RBI has initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC). The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).

If fintechs are allowed to carry out similar services without the tighter regulations governing banks like capital adequacy, know your customer (KYC) requirements, leverage and liquidity norms, there is a risk of creating inefficiencies and risks associated with regulatory arbitrage, Sankar said at an event organised by Business Standard.