Amid deepening crisis, the non-banking financial companies (NBFCs) on Tuesday raised concerns over funding crunch and raised alarm to the finance ministry and the Reserve Bank of India (RBI), said sources familiar with the matter.

Banks have become extremely selective in lending to NBFCs after a crisis hit the sector recently. The representatives urged finance ministry and RBI to look into this issue, sources privy to the matter told CNBC-TV18.

The NBFCs, in a detailed representation to RBI and finance ministry, said that after September 6 -- the date which crisis at the Infrastructure Leasing and Financial Services Ltd (IL&FS) reported -- the rates for lending to them has increased almost 200 bps.

One basis point is a hundredth of a percentage point.

However, the rates have increased only 30 bps for select NBFCs such as HDFC. This is leading to a sort of mismatch in lending rates to NBFCs.