Moneycontrol PRO
Upcoming Event : LeapToUnicorn - mentoring, networking and fundraising for startups. Register now
you are here: HomeNewsBusiness

Coronavirus pandemic | RBI may ease listing deadline for small finance banks: Report

India Ratings pointed out that SFBs will face asset quality issues in the short-term due to COVID-19 related disruptions

April 21, 2020 / 03:12 PM IST

The Reserve Bank of India (RBI) may relax listing deadline for small finance banks (SFBs) amid the novel coronavirus, or COVID-19, pandemic, experts told the Business Standard.

On the possibility that the COVID-19 ripple effect on the economy could be felt for a few months, RBI may extend the deadline for listing by such banks by a couple of quarters, experts told the paper.

Moneycontrol could not independently verify the report.

As per current license conditions by the regulator, SFBs are required to be listed within three years of reaching Rs 500 crore of net worth.

Follow our LIVE Updates on the coronavirus pandemic here

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more

Six SBFs had planned IPOs worth a cumulative Rs 6,000 crore, including offer for sale (OFS) for present promoters, over the next six to nine months based on possible valuation gains.

These are Equitas (which began operations in September 2016), Utkarsh (January 2017), Suryoday (January 2017), Fincare (July 2017), ESAF (March 2017) and Jana (March 2018). They will now have to reconsider based on financial conditions once the countrywide lockdown lifts and taking into account the economic impact of COVID-19.

An India Ratings (Ind-Ra) report pointed out that SFBs will face asset quality issues in the short-term due to COVID-19 related disruptions.

Ind-Ra Director Jindal Haria also pointed out that managing deposits might also become challenging as many SFBs have exposures to microfinance institutions (MFIs), and have granted a two-month moratorium period to MSMEs and individuals.

“They do have access to refinance institutions and as banks to the additional tools to raise non-deposit liabilities to manage their asset-liability management,” Haria noted.

Follow our full COVID-19 coverage here
Moneycontrol News
first published: Apr 21, 2020 03:12 pm