Non-banking finance companies registered a decline in loan disbursement amid global financial crisis. They are thinking to tie up with banks to survive in volatile market. NBFCs are also considering repaying short-term obligations to mutual funds.

Rating agency, Crisil, confirmed that disbursement is declined by about 70 per cent within two months. It expects that NBFS have to work under large banks and sell their services. They are facing problems due to low maturity period on their amount while banks give at least three year maturity period on loans to customers.

NFFS are facing many problems including fund crunch and loss of retail loans to the much-stronger banks.

Managing director and CEO at Crisil, Roopa Kudva said that banks would continue to add to their current 75% market share in retail loans and NBFCs have to adopt innovative measures to retain their growth. NBFC maintains good relations with customers and they can easily sell bank's sponsored loans and services to customers.

Crisil has rated 33 NBFCs so far which accounts for 30 per cent of total number of NBFS. The agency, however, said that NBFCs would not default. They are strong enough to bear credit crunch by their innovative methods.