Shriram Trans Fin reacts to RBI, positively

Shriram Transport Finance is doing very well today morning, up almost 5% higher at Rs.1014, which is in its current intra day high.

The stock is reacting positively as it expects to benefit from the new NBFC norm announced by RBI yesterday.

As per the new norm, RBI has raised the minimum capital requirement wherein all NBFCs, after getting a certificate of registration for continuing business will need to have a networth of at least Rs.1 crore by 2016 and Rs.2 crore by 2017. Asset finance companies will now need to obtain a rating from a rating agency to grade their investment, applicable from March 2016. In terms of bad loans, NBFCs have been brought at par with banks, where NBFCs will have to declare a bad loan if interest has not been paid for 90 days or 3 months, which the rule applicable to banks also. This rule will be effective March 2018.

These rules are applicable for NBFCs which accept public deposits and manage funds worth Rs 500 crore. RBI has also stated that it will soon start issuing fresh NBFC licences.