Mfi shares: RBI has given great relief to NBFCs. The risk weightage on the loan given by banks to NBFCs has been reduced from 125 per cent to 100 per cent. This means that some time ago on the high risk loans, the tightened rein has now been reduced. The new risk weightage will be applicable from 1 April. Apart from this, risk weightage has also been reduced on consumer credit. Let us know that RBI increased the risk weightage in November 2023. The cost of the loan was increased as the risk weightage increased. Why did RBI increase the risk weightage, this decision was taken to curb a higher risk loan. This decision was taken for adequate provisioning of risky loan.
Due to this news, in the trading session of February 27, other stocks including Bandhan Bank, AU Small Finance Bank, Fusion Finance have seen an increase of 8 per cent. Bandhan Bank shares rose by 8.15 per cent to Rs 146.38 per share in early trade. Later, it declined something. Currently, the share was seen by 6.55 per cent to around Rs 144.20. AU Small Finance Bank had a gap-up opening with a 2 per cent gain in today’s trading session. This counter also touched an intraday high of Rs 548.85 with a gain of 4.69 per cent.
Trading Plan: Will Nifty 50 be able to achieve the level of 22,600 again, bank Nifty will climb above 48850
Impact of RBI’s decision
The cost of the loan was increased as the risk weightage increased. At the same time, now reduced the cost of loan will reduce the cost. Due to decrease in risk weightage, banks will now have to keep less money in the reserve. The higher the risk weight, the more provisioning has to be done. Now banks will be able to pay more money to NBFCs. In turn, NBFCs and microfinance will be able to give more loans.
CITI’s opinion on NBFCS/MFIS stocks
Global Brokerage City says NBFCs have got great relief from RBI. The old risk weightage has been restored on the loan given to NBFCs from banks. The risk weightage has been reduced from 125 per cent to 100 per cent. The bank with more NBFC exposure will get relief on the risk weightage asset. With this, 45bps to BOB and 35-40bps to Federal Bank/PNB is possible. Excess MFI exposure bonds/IDFC First Bank, RBL had an impact of rising risk weightage. Bandhan/IDFCFB/RBL 360bps/100bps // 45bps + was affected. Now they will get relief. This decision of RBI will increase credit inflow to NBFCS/MFI segment. Now NBFCs will be able to take loans at low rates. This will benefit NBFCs like MMFS/Chola/Bajaj Finance/Shriram Finance.