NBFC shares hit hard post RBI move on unsecured loans
November 18th, 2023 10:27
Jefferies said NBFCs with a higher share of unsecured consumer loans like SBI Cards (100%), Bajaj Finance (37%) & Aditya Birla Finance (21%) should be most affected by tighter capital norms. Large private banks will see higher impact due to higher share of unsecured loans, according to the brokerage. The impact on public sector banks will be a tad lesser than larger private banks, it said.
Risk weights on AAA NBFC loans doubles to 45%
November 18th, 2023 10:27
Tighter Reserve Bank of India norms mean that the bank risk weights on loans for AAA NBFCs have now more than doubled to 45% from 20% earlier, while those for AA-rated NBFCs have increased to 55% from 30% and for A- rated NBFCs to 75% from 50% earlier. Higher risk weights require banks to set aside more capital to provide cover against such loans.
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