BENGALURU (Reuters) - Indian non-banking financial companies (NBFC) will see some moderation in profitability in the next 12 to 18 months due to higher funding costs, rating agency Moody's said in a report on Tuesday.

In November, India's central bank asked banks to set aside additional capital against loans to NBFCs, making borrowing from banks more expensive for non-bank lenders.

The Reserve Bank of India also increased the capital requirements for unsecured loans for both banks and non-bank lenders.

Indian non-bank lenders have reported healthy loan growth in recent quarters due to strong credit demand, especially in the unsecured lending space.

But as unsecured loans mature, Moody's expects the sector's credit costs, or loan-loss provisions as a portion of gross loans, to increase from cyclically low levels.

It also expects some NBFCs to reduce unsecured lending and increase secured lending after the central bank's November order, and the non-performing asset ratios for non-banks to remain below pre-pandemic levels.

Loans at NBFCs would grow about 15% in the next 12-18 months, Moody's Ratings said.

(Reporting by Nishit Navin in Bengaluru; Editing by Shinjini Ganguli)