Mumbai: The Reserve Bank of India (RBI) said the profits of Indian non bank finance firms grew at a much higher rate in the 2007-08 despite the rise in their expenditure as their fund based and fee based income rose sharply.
Profits more than tripled while expenditure went up 45.4%, the RBI said in its ‘Report on Trend and Progress of Banking in India, 2007-08,’ on Wednesday.
However, while the income as a percentage of assets rose, the expenditure as a percentage of assets declined sharply, resulting in a higher net profits to asset ratio, it also said.
While finance firms, as a whole, reported a drop in bad loans, equipment leasing and hire purchase firms reported an increase during the period, said the RBI.
The move was largely on account of the change in classification rules of NBFCs, it added.