Bajaj Finance has long been known for its conservatism and the company may now consider accelerated provisioning for COVID-19 in the first quarter of FY21. The idea is to further strengthen its balance sheet and reduce the net NPAs to almost zero levels. In the March quarter, Bajaj Finance had already set aside Rs.900 crore as provisions largely for Karvy.

The good news for Bajaj Finance is that their customers are rapidly coming out of the moratorium. The AUM under moratorium reduced from 27% in April 2020 to just 15.5% in June 2020. This shows that more people are repaying their loans and exiting the EMI moratorium status. Its fresh loans in the Jun-20 quarter were lower by 77% YOY.

Total customers of Bajaj Finance at the end of June 2020 stood at 43 million compared to 37 million in Jun-19. Bajaj Finance remains well-capitalised with a comfortable capital adequacy ratio of 26.4% as of the end of Jun-20. Bajaj Finance had a liquidity surplus of Rs. 17,600 crore hinting at a very strong and robust liquidity condition.