According to Crisil Ratings, the reliance of non-banking finance companies (NBFCs) on bank borrowings is anticipated to increase from 43% to 45% by the end of FY27. This shift is driven by lower interest rates in the banking sector, which have made bank loans more appealing compared to bond issuances. In FY26, NBFCs initially relied on capital market instruments, but as bank lending rates declined, they shifted back to bank loans. Bond issuances fell from ₹2.1 lakh crore in the first half of FY26 to ₹1.4 lakh crore in the second half, while bank lending to NBFCs increased to ₹2.5 lakh crore by February 2026. The agency also noted that geopolitical uncertainties are likely to keep external commercial borrowing muted, leading to a preference for securitisation as an alternative funding source. As the macroeconomic environment remains uncertain, diversification of funding sources will be essential for NBFCs to support their growth plans.