Query Detail : RBI Grade B Phase I

In the Economic Survey Video 1 Q27, Option B My doubt is that HFC are MORE exposed to Interconnectednedd Risk when compared to Retail NBFCs, Since HFC have ALM Mismatch Hence Answer to Q27 must be Option 3 Please correct me if am wrong Thank You
Aaref,   April 5th 2020,  
RBI Grade B Phase I


As explained in the video, the interconnected risk here was talking abt the interconnections between the LDMF (Liquid debt MF) sector with the NBFC sector. the LDMF were the major investors in the commercial papers (CP) of the NBFC sector (including HFCs). The data as per the Eco survey shows that the percentage of funds raised by HFCs through CP is relatively lower than that raised by retail NBFCs. therefore the interconnected risk is lower for HFCs as compared to retail NBFCs.

Note - it is not saying that NBFCs don't have interconnected risk or lower in general..it is talking about the data based facts. as per that the comparison shows that retail NBFCs have larger dependence on CP funding as compared to HFCs