RBI Plans To Tighten NBFC Norms

BE/RBI NOTE/43/2018

  1. Reserve Bank of India, the Central Bank, has announced that it will tighten norms for NBFCs
  2. RBI adds that that many of the NBFCs are becoming systemically important and have a higher dependence on short-term sources like commercial papers and mutual funds, CLSA analysts.
  3. The modus operandi is still to be announced by RBI which is being worked out.

Repercussions:

  • Shares of some of the non-banking financial companies (NBFCs) plummeted after Reserve Bank of India in its policy meet on Friday announced its view to strengthen guidelines for such entities to avoid risks.
  • For the fourth consecutive session, shares of Dewan Housing Finance Corporation (DHFL) plunged over 16 per cent, touching its fresh 52-week low of Rs 229.20l
  • DHFL, incorporated in 1984, is a midcap company with a market cap of Rs 7,474.68 crore operating in the finance sector.
  • Shares of several Non-banking companies have been under pressure, of late amid concerns of increased borrowing cost post the IL&FS fiasco.
  • Few of the shares which faced a sizeable fall were:
    • Pioneer Invest Corp (down 17.99 per cent),
    • India Cements Capital (down 13.58 per cent),
    • Edelweiss Financial Services (down 12.82 per cent) and
    • JM Financial (down 11.26 per cent) cracked over 10 per cent.
    • Amrapali Capital and Finance Services (down 9.91 per cent),
    • Pankaj Piyush Trade & Investment (down 9.83 per cent),
    • Elixir Capital (down 9.73 per cent),
    • Magma Fincorp (down 9.58 per cent)

 

Author: Admin Bankedge

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