Non bank lender stocks surge after RBI policy announcement and relaxed norms boost sector
Mumbai: Shares of non-bank lenders and small finance institutions rallied on Mon after the RBI announced regulatory easing on Jun 6. The central bank's decision to lower risk weights on certain retail loans and offer liquidity support lifted sentiment across the sector, pushing several stocks to sharp gains.
Capri Global rose 19.5% to close at Rs.181.6, leading the pack. Five Star gained 9.5% to Rs.800.6, JM Financial advanced 8.9% to Rs.155.2, and IIFL climbed 8.1% to Rs.487.4. while Edelweiss rose 7.3% to Rs.113.4, and Fedfina rose 7.1% to Rs.111.2.
Manappuram increased 6.9% to Rs.264.8, SMC Global rose 6.9% to Rs.126, and Jana Small Finance Bank gained 6.7% to Rs.519.7. Geojit climbed 6.1% to Rs.91.1, Fusion rose 6% to Rs.182.3, and Muthoot Microfin advanced 4.9% to Rs.134.6, while IREDA closed 4.8% higher at Rs.183.3.
The RBI also relaxed asset norms for microfinance lenders and small finance banks. NBFC-MFIs can now allocate up to 40% of their portfolio outside traditional microloans, which is expected to reduce concentration risk and strengthen balance sheets. For small finance banks, lower risk weights on microfinance exposures are likely to ease capital requirements and boost lending capacity.
According to analysts, these changes, along with a supportive macro backdrop, are set to aid credit growth and financial inclusion, especially in underserved areas.
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Umesh Revankar, executive vice chairman of Shriram Finance, said the measures open new momentum for credit expansion in tier 2 and 3 towns.
A research note by Emkay Global said the RBI had adjusted its gold loan norms after recognising operational challenges. It added that this reflected the regulator's intent to reduce friction in the lending ability of banks and NBFCs.
Vivek Singh, CEO of Home Credit India, acknowledged the RBI's recognition of improving trends in unsecured personal loans.
He said this, along with ongoing recalibration efforts, strengthens the industry's commitment to robust underwriting and collections. 'It supports a healthier credit environment and India's growth,' he added.
Meanwhile, George Alexander Muthoot, MD of Muthoot Finance, described the policy shift as encouraging for NBFCs. He noted that the move creates a more favourable environment by lowering borrowing costs and enabling greater access to affordable credit in underserved areas. 'Coupled with a lowered inflation outlook,' he said, 'this is likely to support domestic consumption and stimulate credit demand in the coming quarters.
' Muthoot further commented that the RBI's steps represent 'a timely and positive intervention that can support a stronger credit cycle in FY26.'
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