Shares of non-banking financial companies (NBFCs) showed a mixed trend on the BSE today after the RBI tightened norms for these firms by asking them to have a much stronger capital base.
SREI Infrastructure Finance tumbled 5.95 per cent, while Religare Enterprises fell 2.48 per cent on the BSE. On the other hand, shares of IDFC rose 3 per cent, while LIC Housing Finance was up 3 per cent.
As per the latest directives announced yesterday, RBI has raised the limit for NBFCs to maintain the net owned fund (NOF) requirement to Rs 2 crore.
At present, the NOF requirement is Rs 25 lakh. In a phased manner, the NBFCs would be required to raise it to Rs 1 crore by March 2016 and further double it to Rs 2 crore by 2017, the RBI said.
The move comes at a time when thousands of companies, including various small entities and some large ones, have been under the scanner for illicit fund-raising activities across the country.
In India, the total assets being managed by the financial sector is estimated at $2.8 trillion, out of which over $300 billion are with NBFCs.
With a view to streamline the regulations for the NBFC space, RBI said it would cancel the registration if the companies fail to adhere to norms, starting April 1, 2015 in a phased manner, as against the current practice of ‘temporary suspension’ of Certificate of Registration.