SENSEX NIFTY
May 11, 2012, 09.47 AM IST | Source: Moneycontrol.com

Cabinet clears MFI bill; SKS Microfinance rises 19%

Shares of SKS Microfinance, a non-banking finance company (NBFC) rallied as much as 19% to touch a high of Rs 105.70 in early trade on Friday after cabinet cleared Microfinance bill yesterday, overriding state legislations on microfinance institutions.

Shares of SKS Microfinance , a non-banking finance company (NBFC) rallied as much as 19% to touch a high of Rs 105.70 in early trade on Friday after cabinet cleared Microfinance bill yesterday, overriding state legislations on microfinance institutions.

According to the bill, the Reserve Bank of India will be the regulator for MFI sector. Henceforth, interest rates, fees and premium will be regulated by the RBI.

Also Read - Cabinet nod allows MFIs to recoup of losses, boost biz

SKS Microfinance CFO S Dilli Raj said the company has diversified operations in 18 other states. In the case of Andhra Pradesh, he said they did not plan to exit AP. "Ground level operations in Andhra Pradesh will continue."

He further said the company would reduce headcount by 1,200 and shut down 78 branches. However, he also said they would bring staff back into the fold as situation improves.

At 09:42 hours IST, the share was trading at Rs 98.35, up Rs 9.60, or 10.82%. Its trading volumes increased 162% to 3,56,179 shares as compared to its 5-day average of 136,085 shares. Market capitalisation of the company stands at Rs 720.55 crore.

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