- Tag results for NBFC
Lenders face structural pressure in the area of retail term deposits, with non-bank players offering 33 per cent higher net-of-tax returns for the same gross yield, CLSA said.
While luxury sales have taken a hit, builders in some parts of the country are banking on affordable and premium homes contributing to increased sales.
The segment of housing finance within the NBFC sector is facing stress of liquidity, Srinivas said.
The finding comes amidst the ongoing tussle between the government and RBI which has refused the former's demand to open a special liquidity window for NBFCs which are hit by liquidity crunch.
Reserve Bank Governor Urjit Patel said the liquidity problem in NBFCs is not as severe as is being projected, but assured the government that it would ensure adequate liquidity in the system.
Considering the way the banking and financial system is networked, IL&FS’ inability to meet its commitments is now triggering a crisis in other parts of the system.
We are working on the roadmap for the capital infusion and it will be ready within a week.
Apart from the higher rate trend and NBFC turmoil, the firm added that better retail funding bases and digitisation initiatives are other key favourables for large banks.
This is part of a series of measures announced over the past few weeks since the crisis hit Infrastructure Leasing & Financial Services (IL&FS) and panic over defaults affected NBFCs.
NBFCs sell a part of their loan portfolios from time to time and banks buy these to meet their priority-sector lending norms.
NBFCs are allowed up to 15 per cent of net liquidity mismatch in the lower tenor and do not have strict ALM criteria like banks.
Among others, Muthoot Finance plunged 5.84 per cent, GIC Housing Finance 5.36 per cent, Repco Home Finance 5.30 per cent and LIC Housing Finance 2.60 per cent.
Markets will also take global cues from the US Federal Open Market Committee’s (FOMC) decision on interest rates, while developments in the US-China trade war will be closely monitored.
Tata Capital Financial Services' non-convertible debentures issue opened for subscription on Monday, while Indiabulls Commercial Credit opens on Tuesday.
Experts see increased hiring in tier-II cities for roles in sales, collection underwriting and risk.