After the RBI's internal working group (IWG) as per a report recommended sweeping changes for the banking sector, bank, NBFC and microfinance companies' were in focus today. The panel basically analyzed the guidelines pertaining to ownership and proposed change in the corporate structure at private banks.
Further it mulled on allowing large corporate and industrial houses to own bank by amending Banking Regulation Act, 1949. Besides other recommendation made is increasing the cap of promoter holding to 26 percent from the current 15 percent in view of the NBFCs with asset size over Rs. 50000 crore.
Also, for payments bank that want to transition into small finance bank or SFB, the experience timeline may be dropped to 3 years as against 5 years. And this shall benefit companies such as IndiaPost, Fino Payments and Paytm.
Stocks that gain on RBI's IWG recommenations on banks:
|Ujjivan Small Finance Bank||19.88|
|Ujjivan Financial Services||17.9|
|IDFC First Bank||6.71|
|Shriram City Union Finance||7|
|Bajaj Holdings & Investments||7.5|
Nifty Bank and Nifty Financial Services however pared early gains and traded weak by 0.69% and 1%, respectively.