Brokerages expect a further slowdown in Indian firms' revenue and earnings growth in Q4FY25, following low single-digit growth in the preceding three quarters, as factors like weak consumer demand and credit growth linger on.
Senior bankers point out that while they will eventually attract qualified professionals, onboarding them takes time.
As part of it, the govt may permit 26% FDI in insurance broking through the automatic route.
Commercial banks have turned cautious in lending to smaller microfinance institutions (MFIs), which has compelled the latter to borrow from non-banking financial companies (NBFCs) at much higher rates. Recently Reserve Bank of India (RBI) Deputy Governor M Rajeshwar Rao slammed micro lenders for increasing their margins "disproportionately" and said these lenders were quick to pass on the increased cost to the borrowers but reluctant to pass on the benefits under the new regime, where margins are not capped.
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Stating that there are strong inter-linkages between banks, NBFCs and other deposit-taking entities, he said for monetary policy to be effective and financial markets to remain stable, they should be regulated by the central bank.
'The real repo rate is very high in terms of core inflation.'
Analysts believe that new companies getting into banking space will look at acquiring old private banks. Following this view, there has been a significant rally in banking stocks.
The panel suggests the government be authorised to raise the thresholds, which trigger applicability of Corporate Social Responsibility provisions.
"RBI will given additional licences" for setting up banks in the country, he said presenting the budget for 2010-11 in the Lok Sabha.
The move comes against the backdrop of rising instances of people getting duped by illicit money pooling activities
To ensure more transparency, the new regulations require investment advisers -- banks, non-banking financial companies and corporates -- would have to segregate their investment advisory services from other activities.
'The RBI's clarification on non-performing advances accounting is likely to increase NPAs by around one-third for non-banking finance companies,' domestic rating agency India Ratings and Research said in a report on Friday.
'I think today RBI supervision is much sharper than what it was earlier.'
Non-banking financial companies, that used to comprise at least 70 per cent of the issuance in the corporate bond market, are witnessing a credit freeze as investors shun bond issued by lower-rated firms.
However, financial flows to the economy remained constrained because of decline in the amount of equity finance raised from the capital markets and stress in the NBFC sector, Finance Minister Nirmala Sitharaman pointed out.
The Reserve Bank, in Annual Monetary Policy Statement, has also asked banks to set up internal exposure limits for those non-banking financial companies who have gold loans portfolio of more than 50 per cent of the total financial assets.
Co-lending deals between non-banking financial companies (NBFCs) and banks are likely to rise after the Reserve Bank of India's (RBI's) decision to increase the risk weight on consumer credit, industry leaders and experts say. Smaller NBFCs, they add, may increasingly opt for co-lending as capital markets could become costlier for them. "Smaller NBFCs will be more comfortable with co-lending because they are geography-specific in terms of industry or customers.
'To the believers of crypto regulations, I have only one question to ask, how will you regulate it?'
German luxury car maker BMW on Tuesday launched its financing arm in India with an investment of $50 million (about Rs 230 crore) to serve the credit needs of retail customers, fleet owners and dealers.
The first wave of COVID-19 last year impacted households as their financial savings moderated to 8.2 per cent of GDP in December quarter from 10.4 per cent in the previous three-month period, revealed an RBI data released on Wednesday. The preliminary estimate of household financial savings is placed at 8.2 per cent of GDP in October-December 2020-21, exhibiting a sequential moderation for the second consecutive quarter after having spiked in the pandemic-hit June quarter, RBI said in a release. "The moderation was driven by a significant weakening in the flow of household financial assets, which more than offset the moderation in the flow of household financial liabilities," it said.
The German luxury carmarker on Tuesday said it will invest $50 million (about Rs 230 crore) to set up a financial services subsidiary to better serve its customers besides industry as a whole.
Tech M's priorities include retaining current customers, winning back business lost as a result of the crisis, retaining key associates, winning new businesses and exploring the best ways to realise operational and structural synergies between the two companies. On the possibility of layoffs and cost-cutting, Vineet Nayyar, Tech Mahindra's vice-chairman and MD, said, "I can't say anything. The company has to be viable and we will work at it. Layoffs will be the last option."
Most major corporate houses, such as the Tata group, Birla group and Reliance Industries, besides non-banking financial companies like L&T Finance, M&M Financial Services and the Shriram group, are said to be interested in setting up new banks.
Partha Pratim Sengupta, who will be taking charge as the MD & CEO of Bandhan Bank in early November, has his task cut out. The Kolkata-based lender, which converted itself from a microfinance institution to a universal bank, is in its 10th year of operation. The bank was able to cut down the share of the micro loan book over these years.
In the backdrop of Finance Minister Pranab Mukherji offering banking licences to NBFCs (Non-Banking Financial Companies), rediff.com spoke to T T Srinivasaraghavan, managing director, Sundaram Finance Ltd, the oldest NBFC in the country (founded in 1954).
Back in March this year, when the Reserve Bank of India stepped in with a cap of 60 per cent on the loan-to-value ratio for gold loan non-banking financial companies, it said it was acting to pre-empt systemic risks and to safeguard public funds.
He believes that it leads to conflict of interest.
Rashtriya Janata Dal chief Lalu Prasad has no immovable assets but Rabri Devi, his wife who is also former Bihar chief minister, has over Rs 1.41 crore in terms of landed property.
The discussion on new banking licences will be posted on the website of the central bank for public comments, RBI governor D Subbarao said while unveiling the monetary policy for 2010-11.
The Communist Party of India-Marxist on Thursday demanded a CBI probe into the multi-crore chit fund scam in West Bengal and asked the state government to confiscate all properties of Saradha Group to pay off thousands of small investors left in the lurch.
Finance Minister Pranab Mukherjee's Budget speech on Friday brought closer to reality, billionaire industrialist Anil Ambani's dream of entering the banking sector.
Last month, Competition Commission of India, apex body that operates to sustain and promote competition, sent notices to atleast 15 banks, non-banking financial companies and Indian Banks' Association seeking explanation on why they penalise borrowers who choose to foreclose loans.
The finance ministry's plan to offer basic banking licences may find few takers because of doubts over the commercial viability of the proposed business model.
The new regulations by the Reserve Bank of India (RBI) on microfinance have prompted MFIs to go for a makeover, in order to cope with the new limitations imposed on them.
The pros and cons of investing in gold coins and bars, jewellery, gold ETFs and gold mining stocks.
Fundraising activity in the debt market is gaining momentum ahead of the festival season. Several non-banking financial companies (NBFCs) and the National Bank for Agriculture and Rural Development (Nabard) are planning to raise at least Rs 5,560 crore in the next two days by issuing bonds, with a greenshoe size of Rs 6,370 crore. Ajay Malglunia, managing director and head of investment grade group at JM Financial, said, "The market likes certainty, the market will gain clarity after the US Federal Reserve's (Fed's) policy.
"SIICL, which is one of the group companies belonging to Sahara group, as such cannot transact the business of non- banking financial institutions," RBI said on Friday.
The power sector lender is mulling the coupon it would be offered in a falling interest rate scenario.
