this move by the government is likely to iron out the current challenges for the NBFCs and in turn help the real estate sector.
As share of cash volumes in trading mix sees decline, it will result in moderation of profitability from core broking operations.
In yet another move to close the regulatory gap between banks and shadow banks, the Reserve Bank of India (RBI) has mandated exposure limits to the non-banking finance companies, in line with commercial banks. In the large exposure framework released on Tuesday, the regulator capped aggregrate exposure of NBFCs which are in the upper layer toward one entity at 20 per cent of capital base. The limit can only be extended by another 5% with board's approval. For a particular borrower group, the cap is at 25 per cent, with additional 10 per cent if exposure is towards infrastructure.
The Financial Stability and Development Council meeting on Tuesday started with an air of tension in the room. An official present described the participants' body language as "tetchy". However, once presentations and discussions begun, the mood considerably eased.
'The banking sector appears to be on course to recovery,' declares the RBI governor.
With auditing under the scanner and two of the Big Four firms stopping non-audit services for audit clients, auditors will now be subjected to a more stringent standard of reporting.
This payment of Rs 962 crore is inclusive of the Rs 500 crore DHFL received from exiting its entire stake in subsidiary firm Aadhar Housing Finance Ltd.
The RBI governor's assurance should give investors enough confidence to start believing in the NBFC sector again, say bankers.
A glance back at some of the important ups and down Indian Inc faced in 2018.
In April, the inflows into equity schemes dropped 60% compared to the previous month to Rs 4,608 crore, the lowest since Sept 2016.
Nearly three-fourths of the debt money, as of April 30, 2019, was invested in securities with duration of less than three years.
Firms have to adhere to strict compliance requirements mandated by global parents
For development finance institution to succeed now, the government must stand like a rock behind it and be patient.
Such cold-shoulder by banks also indicates a credit freeze that is hard to overcome, unless the government comes out with credit guarantee schemes for loans given by banks. Since that is not happening, and there is no indication of that too, banks are not willing to listen to RBI prodding.
'The people let off by the NBFCs have little bargaining power and willingly settle for a 20% to 25% cut in their existing salaries when hunting for new jobs.'
'Why are FMPs used as a vehicle for promoter funding against listed shares?' asks Debashis Basu.
It has been a year since the Reserve Bank of India (RBI) initiated prompt corrective action (PCA), an exercise that puts weak banks under central bank scrutiny, against the 94-year-old Lakshmi Vilas Bank (LVB). But recently, this low-profile Chennai-headquartered bank found itself attracting some unwonted publicity when 60 per cent of its shareholders voted against a proposal to re-appoint seven directors, including one of the promoters, K R Pradeep (who holds around 2 per cent), and the company's managing director & chief executive officer S Sundar.
The Sensex ended down 251 points at 27,351 and the Nifty shed 65 points to close at 8,228.
Tamal Bandyopadhyay, columnist and author of several books like From Lehman to Demonetisation: A Decade of Disruptions and Sahara: The Untold Story, tells Rediff.com why Yes Bank depositors should not panic and the current crisis at India's fifth largest private lender does not pose any systemic risk.
'The fact that housing units worth a whopping Rs 4.5 lakh crore in top seven cities are stuck under various stages of non-completion indicates that there is a dire need to create stress-asset fund which will help bail out lakhs of distressed homebuyers,' says Anuj Puri, Chairman, Anarock Property Consultants, a real estate services company.
'We have promised to ensure reduced tax rates.'
Sensex ends 134.91 pts down at 28,709.87; Nifty falls 44.70 pts at 8,712.05.
Ajit Mishra, vice president, Research, Religare Broking, answers your stock market queries.
Investors cheered a sharp decline in the Current Account Deficit, which stands at a 4 year low as exports picked up and gold imports reduced.
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