NBFC remain in limelight after RBI floats final guidelines on new banking licences

Non-banking financial shares were trading with traction after RBI issued guidelines allowing any business sector to apply for banking licenses.

Mahindra & Mahindra Financial Services is currently trading at Rs 203.75, up by 4.60 points or 2.31% from its previous closing of Rs 199.15 on the BSE. The scrip opened at Rs 209.90 and has touched a high and low of Rs 218.00 and Rs 198.55 respectively. So far 562944 shares were traded on the counter.

Bajaj Finserv is currently trading at Rs 850.10, up by 26.45 points or 3.21% from its previous closing of Rs.823.65 on the BSE. The scrip opened at Rs 899.00 and has touched a high and low of Rs 899.00 and Rs 834.70 respectively. So far 53249 shares were traded on the counter.

SREI Infrastructure Finance is currently trading at Rs 37.85, up by 1.85 points or 5.14% from its previous closing of Rs 36.00 on the BSE. The scrip opened at Rs 38.00 and has touched a high and low of Rs 38.70 and Rs 37.10 respectively. So far 629617 shares were traded on the counter.

Religare Enterprises is currently trading at Rs 293.95, up by 23.60 points or 8.73% from its previous closing of Rs 270.35 on the BSE. The scrip opened at Rs 281.15 and has touched a high and low of Rs 302.85 and Rs 281.15 respectively. So far 116738 shares were traded on the counter.

L&T Finance Holdings is currently trading at Rs 85.65, up by 4.00 points or 4.90% from its previous closing of Rs 81.65 on the BSE. The scrip opened at Rs 85.70 and has touched a high and low of Rs 85.70 and Rs 81.00 respectively. So far 977472 shares were traded on the counter.

Setting the stage for corporate giants to enter the highly regulated banking space as the Reserve Bank of India (RBI) on February 22 floated the much awaited guidelines for issuing new bank licences. Accommodating the Government’s viewpoint, the central bank reversed the stand it had taken in the draft guidelines of not allowing broking and real-estate companies in the banking space.

The RBI unveiled that Entities / groups in the private sector, 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).

As per the final guidelines, the minimum capital requirement for opening a bank was set at Rs 500 crore, while the foreign shareholding was capped at 49%.It also specified that entities applying for the new bank licences should have past records of 'sound credentials and integrity, be financially sound with a successful track record of 10 years. For this purpose, the banking regulator may seek feedback from other regulators and enforcement and investigative agencies.  Further, the new lenders would be required to open at least 25 percent of their branches in unbanked rural centres, whose population is less than 10,000. Interested firms are expected to apply for the new bank licences to the central bank till July 1, 2013.