NBFC stocks gain after RBI issues banking guidelines

Stocks

oi-Sneha

By Sneha B K

Published: Monday, February 25, 2013, 10:05 [IST]

Shares of the non banking finance companies gained on Monday after the Reserve Bank of India on Friday said that NBFCs are permitted to convert into new bank if they meet eligible conditions.

"Entities/groups in the private sector, entities in the public sector and non-banking financial companies (NBFCs) shall be eligible to set up a bank through a wholly-owned non-operative financial holding company (NOFHC)," RBI said in a notification.

RBI, however, said those banks promoted by groups having 40 per cent or more assets or income from non-financial business will require its approval for raising paid-up equity capital beyond Rs 1,000 crore for every block of Rs 500 crore

Shares of the Mahindra & Mahindra rose more than 6% and was seen trading at Rs 211 on BSE at 9.50 am IST. Shriram Transport rose and was seen trading at Rs 715. Reliance capital gained 2% at Rs 415.

Companies who are eligible and could get new banking licenses could get more attention from investors.

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