Industry players believe the new DFI model will be initially risk capital, which will then be used to mobilise additional resources from development agencies such as World Bank.
In 2009, the UPA government, had announced a slew of measures to boost liquidity in NBFCs. These included a scheme for providing liquidity support to NBFCs having assets size of over Rs 100 crore through a SPV.
Religare has engaged McKinsey to help it build an emerging market investment bank.
Invest only if you wish to go overweight on the sector.
The protocol aims to "democratise" lending, reduce costs of credit, and ensure accessibility of credit to small companies and street vendors, according to Nandan Nilekani.
'There is still scope for selective stockpicking.'
'The shadow banks are currently facing a liquidity and solvency crisis.' 'The danger is that it could potentially engulf the entire financial system because shadow banks have borrowed huge amount of money from banks, mutual funds, pension funds, and insurance companies.'
the three investors that have submitted their final bids are not commercial banks. Among the three, one is a non-banking financial company. Another distinctive feature of the revival is that PMC may lose its cooperative bank characteristic after its reconstruction.
S&P Global Ratings on Monday expressed scepticism over allowing corporate ownership in banks given India's weak corporate governance amid large corporate defaults over the past few years. It also said that the Reserve Bank of India (RBI) will face challenges in supervising non-financial sector entities at a time when the health of financial sector is weak. Last week, a RBI panel had proposed that large corporate may be permitted to promote banks, as well as raising the cap on promoters' stake in private sector banks to 26 per cent, from15 per cent at present.
If the policy is extended to NBFCs and co-operative banks, they will have to disclose divergence in asset classification and provisioning during RBI inspections in their audited financial reports. Till now, these entities have been exempted from this. At present, there are more than 98,000 co-operative banks and 10,000 NBFCs. Sources said the RBI would concentrate on the top 50 co-operative banks and NBFCs.
The legislation is being implemented by the Corporate Affairs Ministry. Many provisions of the new law came into effect from April 1.
With liquidity crunch hitting operations, many finance companies have put the brakes on sanctions in the third quarter in the aftermath of the IL&FS crisis.
'The ship has been stabilised.' 'For the last 6-7 quarters, profitability is stable around Rs 250-Rs 300 crore.'
Going by the current pace, IT firms are likely to exceed the manufacturing sector in salary payouts over the next five years.
'Banks, fund managers, NBFCs, rating agencies, those buying into debt funds -- all of them will have to watch their step as India's financial system enters a new phase,' warns T N Ninan.
Keep regular track of financials, including cash flow and management changes
Banks, through the Indian Banks' Association, have urged RBI and credit information companies to maintain a database of wilful defaulters.
If you pledge market-linked instruments and their value plummets, you will have to provide additional collateral, points out Sanjay Kumar Singh.
The Reserve Bank of India's (RBI's) latest order on unsecured loans is set to hit the banking sector's growth in the near-term, cautioned analysts, as they see banks slowing down on aggressive retail lending. Besides, cost of funds for non-banking finance companies (NBFC) is expected to inch up as banks will pass on higher capital charge to NBFCs. "We believe the fallout of the RBI action will be mainly on growth, given the rising dependence on unsecured retail loans and lending to NBFCs for growth.
In India, economic activity slowed substantially in 2019, with the deceleration most pronounced in the manufacturing and agriculture sectors, whereas government-related services sub-sectors received significant support from public spending, the Bank said.
Shares of Motilal Oswal Financial Services, Edelweiss Financial Services and IIFL Holdings have all doubled in the past one year against the Sensex's 23 per cent gain.
India's biggest non-bank finance company, Bajaj Finance (BAF), is set to raise capital after a gap of four years. On October 5, the board of directors will meet to approve the fund raise by way of preferential issue and/or qualified institutional placement (QIP) subject to regulatory and shareholder approvals. The move, analysts said, comes ahead of expectations, and could be in the wake of simmering competition in the consumer lending space, especially with the launch of Jio Financial Services (Jio Fin). "While we still do not have finer details on the game-plan of Jio Financial, it has plans to initially foray into consumer and merchant lending.
'In the short-term, the markets may be affected' by the review but 'it will help address what they are worried about which is why we need transparency,' says former chief economic advisor.
The demand environment is expected to improve over the next three quarters, aided by a recovery in demand from the construction sector, following release of payments to contractors after elections.
Anil Ambani Dhirubhai Group company Reliance Capital Ltd on Tuesday posted over a three-fold rise in net profit after tax at Rs 94.53 crore (Rs 945.3 million) for the quarter ended June 30.
Companies that are listed or are in the process of being listed, and have a net worth of at least Rs 500 crore, must adopt these standards from April 1, 2016.
India's corporate sector is likely to report a slowdown in revenue growth and earnings for the July-September 2023 period (Q2FY24), according to earnings estimates by brokerages, after the country's top listed companies posted higher than expected profits for the first quarter. The combined net profit of Nifty50 companies, based on brokerage estimates, is expected to have grown by 19.6 per cent year-on-year (Y-o-Y) to Rs 1.75 trillion in Q2FY24 - a sharp deceleration from 37.6 per cent Y-o-Y growth in the combined earnings of index companies in the April-June 2023 period. According to estimates, the combined earnings in the second quarter would be down 8.8 per cent on a quarter-on-quarter (Q-o-Q) basis and the lowest in the past three quarters.
Financial planners advise against putting capital to work by anticipating what might go up or down.
Half a dozen stocks from the large-cap universe and over two dozen from the mid-cap universe have been replaced.
During a three-hour long virtual meeting with CEOs of large public and private sector banks along with heads of NBFCs, the prime minister assured them that the government is ready to take all steps to support the financial sector.
While the bond market is relatively conservative about their interest rate expectations, the currency market seems to be projecting that interest rates should be much sharper
The chamber has sought clarity from government to remove uncertainty among businesses
The country's franchise industry is estimated at $24 billion with a year-on-year growth of 30 per cent.
Industry representatives have said from the second half of the year, they hope to see revival because the rural economy is looking up and the projects the government has announced.
Experts attribute the lower target to increased allocation under the credit guarantee scheme for small businesses. Out of the Rs 3.21 trillion worth loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY) in the last financial year, Rs 3.12 trillion were disbursed to entrepreneurs, according to official data.
Keki Mistry, bottom, left, vice-chairman, Housing Development Finance Corporation (HDFC), tells Joydeep Ghosh that debt fund investors could become risk-averse, leading to problems for other non-banking financial companies.
Defying trends, the country's largest private sector lender, HDFC Bank, has shifted its asset mix significantly towards high-rated segments. As a result, its wholesale-to-retail mix has tilted heavily in favour of wholesale, even at the cost of margins. Further, it is even looking to ramp up its branch network, with an aim to service clients within a 1-2 km radius rather than the current 5-6 km radius.
The RBI is understood to be dithering since it would want more clarity on the cost of the fiscal policies the new government would undertake before it decides to cut rates, even though it has pencilled in a lower gross domestic product growth rate for this fiscal year.
IT, FMCG and manufacturing sectors are less attractive to foreign portfolio investors
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