Tag: nbfc

Shares of Mahindra & Mahindra Financial Services (MMFSL) hit a 52-week high of Rs 216.75 on the BSE, gaining 4 percent in Monday's intra-day trade after the company recorded a 75 percent on-year growth in disbursements in August, In an exchange filing last week, the company mentioned that it disbursed Rs 3,740 crore in August. However, on a sequential basis, the number is down 4.4 percent. The number is also lower than the disbursals made in July Rs 3,912 crore and June Rs 3,750 crore."The year-to-date (YTD) disbursement is at approximately Rs 17,150 crore and registered a YoY growth of 104 percent. This has resulted in YoY growth of around 12 percent and sequential month-on-month growth of around 3 percent in gross business assets," MMFSL said in the August month business update.The Collection Efficiency during the month of August remained stable at 96 percent, compared to 97 percent in August 2021.The figure has oscillated between the 95-97 percent mark over the last four months Read more

Bajaj Finance's share price rose 5 percent on July 6 after the company reported better numbers for the quarter that ended June 2022. Bajaj Finance, a leading NBFC company, witnessed a 31% Year-on-Year (YoY) growth in its core assets under management in the quarter that ended June 30, 2022. The company's AUM grew from approximately Rs 156,115 crore on 30 June 2021 to Rs 204,000 crore as of 30 June '22. Bajaj Finance witnessed the highest ever quarterly increase in its customer franchise of 2.7 million in the initial quarter of FY23. Customer franchise of the company increased from 50.5 million in June 2021 to 60.3 million in June 2022 and new loans booked during the first quarter of 2023 were 7.4 million compared to last year’s 4.6 million, the company said in a filing to the exchanges. Bajaj Finance continues to remain well-capitalized with a CRAR of ~ 26.2%. Read more

The Reserve Bank of India (RBI) has turned down the request of non-banking financial companies (NBFC) to relax asset classification and provisioning norms. This will give rise to bad debt numbers of such para banks on technical grounds while making asset quality norms standardised across banks and NBFCs. The para banks are now rapidly filling in the positions left vacant by the risk-averse banks, and their asset book is close to 20 percent of banks’ total credit. The NBFC lobby group Finance Industry Development Council (FIDC) had approached the RBI to offer relaxation in the NPA norms, but the RBI has declined to do so, according to the sources. Read more

RBI in its April 27th norms on auditors had said banks and NBFCs, excluding those that don’t take deposits and have a sub-Rs 1,000-crore asset base, must immediately bring in new auditors. The para banks, however, were allowed to do the change from the second half of the fiscal year. Banks and NBFCs, having an asset size of Rs 15,000 crore or more, were asked to appoint joint auditors. Crucially, there was retrospective applicability of the extended eligibility criteria for auditors, including those relating to the provision of audit and non-audit services. Both the NBFC lobby group Finance Industry Development Council and the Confederation of Indian Industry protested the rules. However, the RBI argued that the guidelines are compulsorily applicable to only 300 NBFCs, of the 9,600 operational in India. The other NBFCs, with asset sizes below Rs 1,000 crore, have the option to continue with their existing auditors. Read more

Newly-appointed deputy governor M Rajeshwar Rao today (6th November 2020) said larger non-banking finance companies (NBFC) should be regulated as strictly as banks in order to preserve financial stability, at the same time letting the other NBFCs enjoy the light-touch regulation for the sector. The sector can expect to witness a graded regulatory framework for NBFCs "calibrated in relation to their contribution to systemic significance.” This may include having a relook on the regulation of microfinance institutions, and curtailing the regulatory arbitrage enjoyed by certain NBFCs that are neither too big to cause systemic instability, nor small enough to be ignored. "NBFCs with significant externalities and which contribute substantially to systemic risks must be identified and subjected to a higher degree of regulation. One can also argue that the design of a prudential regulatory framework for such NBFCs can be Read more

The health of India’s NBFCs remained resilient in August, suggesting that record stimulus steps by the central govt are helping the crisis-hit sector ride out the pandemic. Premiums on non-bank lenders’ bonds narrowed to a two-year low, according to an index of AAA-rated five-year notes. Three other indicators compiled by Bloomberg, covering areas including liquidity and share performance, stayed steady from the previous month, with two at levels indicating strength. India’s non-bank lending sector was hit by a crisis in 2018 when a large financier unexpectedly defaulted, and the nation now needs it to stay healthy in order to prevent the gross domestic product from shrinking further. The reach of shadow banks extends into many corners of the economy, as they lend to a wide range of businesses from road-side teashops to tycoons. Read more