Mumbai, April 30 -- Non-banking financial companies (NBFCs) in India are largely well-positioned to absorb the impact of expected credit loss (ECL) provisioning norms, with most entities already maintaining adequate buffers, according to a recent report by Kotak Institutional Equities.

The Reserve Bank of India (RBI) has finalised ECL guidelines for banks, effective FY2028, introducing minimum provisioning floors across loan categories to ensure prudence and reduce model risk.

While these floors currently apply only to banks, the report indicates that if similar norms are extended to NBFCs, the impact is expected to be manageable. NBFCs have already been following ECL-based provisioning since FY 2018, giving them a significant head star...