Bond yields have moved up by 53 basis points (bps) so far in Q3 of FY18. This hardening of bond yields is likely to impact the cost of funds for non banking financial companies (NBFCs). In an interview to CNBC-TV18, PV Ramesh, CMD of Rural Electrification Corporation (REC) spoke at length about the same.
Ramesh said that the cost of funds is expected to rise in calendar year 2018.
He further said that we are looking to raise funds at competitive rates in domestic and overseas markets.
On margin front, he said we see some pressure with regards to margin going ahead. However, expect volumes to take care of margins.
"Our sanctions have gone up 20 percent and we are expecting our disbursements to go up by more than 10 percent," he added.
There is no deterioration in asset quality, added Ramesh.
He further added that we are seeing stress in private companies that form 15 percent of company's book.Watch accompanying video for more details.