Bandhan Bank, Credit Access Grameen stocks surge up to 12% as RBI reverts risk weights on bank loans to MFIs

Bandhan Bank, AU Small Finance among other shares rise as RBI restores risk weights on loans from banks

Bandhan Bank, AU Small Finance Bank, Fusion Finance among others rose up to 8 percent in February 27 trade after the Reserve Bank of India (RBI) on February 25 restored the risk weights on the exposures of schedule commercial banks (SCBs) to non-banking finance companies (NBFCs). The move is expected to come as a breather to as the cost of funds may come down.

Moneycontrol reported earlier that the restoration of the risk weights on the bank loans to NBFCs has been a quite long ask from the industry players amid rising borrowing cost.

NBFCs get breather as RBI restores risk weights on loans from banks

Bandhan Bank shares advanced 8.15 percent to day's high of Rs 146.38 per share on the NSE in early trade. Later in the day, it pared some of the gains to trade at Rs 144.20 apiece, higher by 6.55 percent.

RBI lowers risk weights on bank loans to NBFCs from 125 percent to 100 percent, effective April 1; IndusInd Bank, Bandhan Bank set to gain with notable CET1 ratio improvement.

Shares of CreditAccess Grameen Ltd rose 15.11 percent to Rs 997.4 per share on the NSE, its intraday high, while the shares of Cholamandalam Investment and Fin Co Ltd advanced 5.27 percent to the day's high of Rs 1,439.95.

Indusind Bank shares also edged higher to touch an intraday high of Rs 1,063.3 per share on the NSE, rising 2.81 percent. The stock has been gaining for the last two days. AU Small Finance Bank opened gap-up with a gain of 2 percent in today's trading session with the counter touching an intraday high of Rs 548.85, rising 4.69 percent.

Meanwhile, Bank Nifty also snapped its four-day losing streak and edged higher in trade today, driven by gains in heavyweight stocks such as HDFC Bank, Axis Bank, IndusInd Bank, and IDFC First Bank.

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