In an interview with Surajeet Das Gupta, Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, charts out the challenges and way forward for the economy as well as NBFCs
The RBI has so far not provided any clarity on whether banks will grant moratorium to the shadow lenders on the loans they have availed
Besides challenges faced by wholesale NBFC in particular, the credit costs (amount to be provided for stressed assets), are likely increase post outbreak of COVID 19
Here's a selection of Business Standard opinion pieces for the day
Although the government has allowed NBFCs, HFCs to start operations, they have not allowed resumption of operations in hotspots and have also not permitted field activities
A slow recovery will increase credit risk
Credit guarantee by the government for banks' fresh loans to certain segments might do the trick at a small fiscal cost
Treat exit by retail investors as a contrarian signal for entering equities
'Repo rates are at a 16 year low and this can bring the much needed stimulus to the sector, both at the retail and wholesale levels, if banks pass on the benefit to borrowers'
The latest measure has come as two of its most innovative liquidity measures worth Rs 2 trillion since February 6 did not elicit the desired effect
On Friday, the RBI said it will conduct the second tranche of targeted long-term repo operation (TLTRO 2.0) for an aggregate amount of Rs 50 billion, to begin with.
These companies are prepared to lend more to customers as the price of gold mortgaged by them has gone up sharply, making them eligible for larger loans
However, there was no clarity on whether the finance companies that borrow from banks would get the option to delay payments to their lender banks.
Unless demand revives, industry experts say the move may not be very effective
Mistry tells Joydeep Ghosh that while the National Housing Bank has been allowed to refinance housing finance companies, relaxation of single-party exposure would be a big help
RBI has put the ball in banks' court on the moratorium issue
Most global markets surged as investor appetite for risk assets improved due to the progress of an experimental drug for treating covid-19 and on US's plan to reopen its economy.
Among other important announcements, he announced a reduction in reverse repo rate by 25 basis points from 4 per cent earlier to 3.75 per cent now
In his bid to fight the coronavirus (Covid-19) induced slowdown, the governor has made it clear that he doesn't want banks to park money with the RBI.
The RBI has indicated that it expects inflation to come down by September, which means that more rate cuts are in the offing