Ujjivan, ESAF, Equitas, and other small finance bank shares rally up to 6% as RBI eases priority sector lending norms
ADVERTISEMENT Among the gainers, ESAF SFB surged 6% to Rs 33.16, followed by Ujjivan SFB, which rose 4% to Rs 50.20. Utkarsh SFB climbed 4%, Equitas SFB gained 4.6%, Suryoday SFB advanced 2%, Jana SFB rose 2.7%, and AU SFB edged up 1%.
Also Read: 11 Nifty mid & smallcap stocks that can rally 40-90% over the next 12 months
Currently, small finance banks (SFBs) are required to lend 75% of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBE)—whichever is higher—to priority sectors such as agriculture, MSMEs, and education. Under the revised norms, this requirement will be reduced to 60% starting from FY26.
From FY26 onward, SFBs will continue to allocate 40% of ANBC or CEOBE to specific sub-sectors under the Priority Sector Lending (PSL) framework, as per existing guidelines. The remaining 20% can be deployed across any PSL sub-sectors where the bank has a competitive edge.
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In March 2025, the RBI revised the Priority Sector Lending (PSL) guidelines to expand loan limits for categories such as housing and education, and similarly reduced the PSL target for urban cooperative banks from 75% to 60%.
ADVERTISEMENT According to the RBI, these changes aim to provide greater operational flexibility to small finance banks while ensuring the continued flow of credit to critical sectors. The revised PSL norms will come into effect from April 1, 2025.
Also Read: $2.4 trillion worth of gold! India's household hoard is 6x Pakistan's economy
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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First Post
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- First Post
Cryptocurrency: America rushes in where India, China fear to tread
Geopolitics has revived the 'crypto wars' of the 1990s, yet today the struggle is continental rather than computational. On one flank stand the United States and much of the West, treating digital tokens as just another volatile asset class to be tamed by markets and tolerated by regulators. On the other side stand China and India, unlikely fellows whose shared suspicion of borderless money has inspired a twin assault on private crypto-currencies. Whether laissez-faire zeal or dirigiste caution proves the surer guide will shape global finance. STORY CONTINUES BELOW THIS AD Beijing fired the latest salvo on May 31, when it imposed a blanket ban on mining, trading and even private ownership of coins such as Bitcoin and Ethereum. The decree capped a decade-long squeeze that began with banking curbs in 2013, hardened into an ICO prohibition in 2017 and outlawed onshore transactions in 2021. Three concerns drove the final kill switch. First, capital flight: analysts reckon more than $50 billion seeped out of China via crypto in 2019-20. Second, financial stability: untamed price swings threaten household savings and could undermine the country's highly leveraged property developers and shadow banks. Third, political control: decentralised ledgers collide with the Communist Party's quest for digital sovereignty and jeopardise the e-CNY, a central-bank token Beijing insists must sit on the throne. New Delhi has not gone so far, yet it has tightened the fiscal tourniquet. Gains on any coin attract a punitive 30 per cent tax and a one-percent tax deducted at source on every trade. The Reserve Bank of India, which once likened Bitcoin to a Ponzi scheme, still campaigns for an outright ban, warning that borderless money could drain rupee sovereignty and turbocharge illicit flows. Across the Pacific the mood is giddier. Roughly one in six American adults already owns some crypto. 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Beijing and New Delhi see an escape hatch through which wealth, tax and ultimately sovereignty might vanish. Studies of money laundering reinforce their fears. Forensic firms report that criminals cherish the 'virtually instant' cross-border hop of tokens, and European police agencies warn that professional crypto-launderers now pose a systemic threat. Officials fret that a mere string of private keys could spirit fortunes abroad faster than regulators can draft circulars. STORY CONTINUES BELOW THIS AD Yet the prize is hardly stable. Bitcoin has crashed by more than 50 per cent five times: from 1,200 dollars to 200 in 2013, from 20,000 to 3,000 in 2018, and from 69,000 to 20,000 in 2022, before roaring past six figures in late 2024. Still, adoption creeps upward. Roughly 560 million people—almost seven per cent of humanity—now hold a sliver of crypto. Millennials dominate in America; in Vietnam and Nigeria grass-roots users are even younger. 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Economic Times
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Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel The global fixed income backdrop is shifting as the US Federal Reserve looks poised to deliver its first rate cut of the current cycle this September. Markets place the odds of a 25 basis point cut at nearly certain levels, with the target fed funds range expected to move from 4.25–4.50% down to 4.00–4.25%.With signs of slowing labour markets, muted inflation pressures, and the potential for up to three cuts before the end of the year, this marks a clear pivot from the Fed's long pause since December US yields have moved materially, Indian bond yields have tended to react, largely via sentiment and capital easing cycles in the US have often led to benign moves in Indian yields, though the scale and speed vary depending on domestic now, the global shift towards easing, if sustained, can encourage flows into emerging market debt such as India's — a factor that can help anchor local yields, especially in the absence of major fiscal Indian bonds have held up in the face of global volatility. The RBI has already front-loaded policy easing since February, cutting the repo rate by a cumulative 100 basis points to 5.50%.This was complemented by large liquidity support, with a further 100 basis point CRR cut to be phased in from September to November, adding approximately INR2.5 lakh crore of liquidity into the banking has been running below the 4% target, with CPI in July printing at just 1.55%, though the RBI's projections point towards a gradual climb, crossing 4% in early forecasts remain steady at 6.5% for FY26, supported by rural consumption recovery and government-led capital expenditure As many market participants have also observed, the local yield curve has steepened in recent months, especially between the 10-year and 15-year maturities, as limited 10-year supply and cautious sentiment have pushed intermediate yields bonds have been relatively more stable. This steepening has occurred even though the underlying global and domestic macro backdrop arguably favours a constructive duration fixed income investors, the next 12–18 months seem to offer opportunities at both ends of the maturity spectrum. In the near term, credit spreads in high quality corporate bonds remain stable and 1–5 year AAA-rated corporate bonds with short-duration accrual strategies can deliver steady income while benefiting from the downward drift in short-term rates as CRR cuts inject part of the portfolio plays defence while locking in yields that may compress other leg of positioning is to maintain core exposure to long-duration government bonds , particularly in the 14–15-year segment and selectively at the very long steepening at the longer end seems to be overdone relative to fundamentals, and a normalisation of sentiment or moderation in supply could see spreads Fed easing and global growth softness push US and Indian yields lower, this part of the book stands to benefit from capital this barbell approach — accrual-oriented short duration plus strategic long duration — aligns with an outlook where local rates are near the end of their easing cycle but global conditions remain supportive for RBI may hold through October and consider one final 25 basis point cut in December, but even without it, abundant liquidity and anchored inflation expectations should keep yields remain — from renewed inflation pressures, higher long-bond supply, or global shocks — but the balance of probabilities favours a stable to stronger bond market therefore, can use the current steepness in parts of the curve to add duration selectively while earning carry from shorter corporate a patient strategy for a cycle that appears closer to its bottom in India yet is still in its early stages globally.(The author is Managing Director and Head of Investment Strategy & Solutions, Waterfield Advisors.)(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
an hour ago
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