Impact of Change in Interest Rates on Profita...

Impact of Change in Interest Rates on Profitability of NBFC’S of India

Author Name : Dr. Mangala Nayak Yaragatti, Ms. Jyoti M Sirsikar

ABSTRACT

Financial Service sector plays very important role in Indian economy. Financial Service sector is boosting various sector of Indian economy by providing finance. Financial Service sector is earning profit by charging interest on provided finance. But profitability of Financial Service sector is not depended on how much are their providing finance to others. Profitability of Financial Service sector is depended mainly on the interest rates that they charged on loan. If any change take place on interest rates would directly affecting to the profitability of NBFC’s. The Non-Banking Financial Companies (NBFC) sector in India has traversed highs and lows to reach where it is today. The study aims to examine the improvement in financial performance of 5 NBFC’s those are listed in NSE. To study the financial performance of the NBFC’s i.e. Bajaj Finance Ltd, M&M finance company Ltd, Shriram Transport Financial Company Ltd, Muthoot Finance Ltd and Power Finance Corporation Ltd companies are selected and last ten years data is used during a time period from 2011 to 2021 to analyze impact of interest rateson NBFC’s.Various kinds of Profitability ratios have been used to analyze the profitability performance of the selected NBFC’s. Different statistical tools like; Mean, Standard Deviation, Coefficient of Variance and Analysis of Variance (ANOVA) have been used extensively to validate the findings of the study.Their scale of operations and diversity in financial intermediation are testimony to their adaptability and agility in transforming their business models, gauging needs of a growing economy.

Keywords: Interest Rates, Profitability Ratios, Non-Banking Financial Companies.