RBI Circular will have a Positive Effect on NBFC & Banking sectors: CapitalAim

Mr. Romesh Tiwari, Head of Research, CapitalAim.

"RBI's circular has softened the aggressive approach they took in February which was challenged in Supreme Court. The Banks will now have some time for deliberations before taking extreme measures. Investors have to watch closely how the lenders make new provisions and draft policies for stressed assets. The more transparent it gets, the better it is for investors but for now, it will be wait and watch time for new investors as there may be new revelations in the coming month. Besides, the Circular will have a positive impact on NBFC & Banking sectors in the long term but for the near term, it will depend on how the lenders react and take the policy measures. As this will also apply to NBFC sectors and this will bring more transparency about their loan book status and early recognition of any possible bad loans, resulting in more informed decision making by investors in this sector. Overall it is a welcome move and will have a positive effect on both the sectors."

Source : Equity Bulls

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