The RBI wants NBFCs to diversify their sources of funds further away from banks. The hike in risk weights on bank loans to NBFCs announced in November should encourage better pricing of risks by banks
The move will slow down growth in consumer credit and adversely impact the earnings of banks and NBFCs
The move is aimed at deploying more money towards road, power and infrastructure projects, a space that has been dominated by NBFCs
The bonds would be of 10-year maturity, with a yield of 9.5-10 percent
Nischint Chawathe of Kotak Institutional Equities expects the housing finance companies from the NBFC space to out perform others.