InvestorQ : Is it true that the RBI package announced on 17 April was a boost to NBFCs. How do you see stocks like Indiabulls Finance, Bajaj Finance and HDFC?
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Is it true that the RBI package announced on 17 April was a boost to NBFCs. How do you see stocks like Indiabulls Finance, Bajaj Finance and HDFC?

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Aditi Sharma answered.
11 months ago
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You can certainly say that the RBI package announced was a sure leg up for the NBFC sector. Here is why.

· The package was for markets overall, but primary focus was to help the NBFCs survive challenges posed by COVID-19

· RBI cut reverse repo rate by 25 bps to 3.75%. This reduces what banks earn on the monies parked with RBI. Banks will be incentivized to lend to industry than parking funds

· RBI permitted NBFCs to postpone realty loans up to 1 year where delay in the project completion is due to genuine business distress. This will not attract higher provisioning or reclassification as sub-standard

· Look for TLTRO 2.0 in addition to the regular TLTRO. The special TLTRO for NBFCs of Rs.50,000 crore will have 50% reserved for mid-sized NBFCs

· NBFCs have Rs.250,000 crore of NCDs and CP coming for repayment before May 2020. This offers them a window and will save NBFCs from a large default.

· RBI clarifies on impact of 3-month moratorium. Any NPA classification on loans given by banks and NBFCs will only start after excluding the moratorium period given as part of the COVID-19 rescue package.

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