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Business Standard
4 days ago
- Business
- Business Standard
MFI stress to remain steady in coming quarters: RBI's DG Swaminathan
Stress in the microfinance portfolio is expected to stabilise over the next couple of quarters, Swaminathan J, Deputy Governor, Reserve Bank of India (RBI), said on Friday during the post-monetary policy press meet. Meanwhile, RBI on Friday relaxed the qualifying criteria for Non-Banking Finance Companies (NBFCs) to be classified as Microfinance Institutions (MFIs). Under the revised criteria, NBFCs will have to maintain 60 per cent of their assets in the microfinance loan portfolio instead of the earlier 75 per cent. 'The entities predominantly in this segment have already identified, recalibrated their business models, and stepped up their collection methodologies. We have also seen a shrinkage of that portfolio due to this recalibration,' Swaminathan said, referring to MFIs. 'So, maybe over a period of time, over the next couple of quarters, this should stabilise,' he added, cautioning that much will depend on overall economic conditions and income levels, as MFI portfolios remain the most vulnerable segment. 'Q1 (FY26) is likely to see a peak in slippages. The various guardrails put in place by MFIN and Sa-Dhan are expected to benefit the sector in the long run. However, they will cause some short-term pain, which was necessary to clean the system. By Q2 or Q3, slippages should start to moderate. The only caveat is that MFI growth this year is expected to remain muted due to asset quality challenges coupled with slower growth,' said an official from a private bank. According to the CRIF High Mark report, the gross loan portfolio of NBFC-MFIs shrank by 18.2 per cent year-on-year to ₹1.8 trillion at the end of 31 March 2025. Experts said RBI's move to relax the qualifying criteria for NBFCs to be classified as MFIs will allow these companies to diversify into secured assets and continue growth, especially as self-regulatory organisations (SROs) tighten guardrails on the MFI portfolio. 'Reduction in the qualifying asset criteria for NBFC-MFIs shall improve their loan diversification, thereby augmenting their credit risk profile, and shall enable them to meet other credit requirements of their end borrowers,' said A M Karthik, Senior Vice President, ICRA. Ganesh Narayanan, CEO, CreditAccess Grameen, said, 'This policy shift will enable accelerated diversification within our operations, ensuring balance sheet stability and positioning us for robust cross-cycle earnings. The RBI has time and again introduced progressive measures that support the growth of the microfinance sector, creating a more inclusive ecosystem.'
India.com
21-05-2025
- Business
- India.com
Stock market update: Sarveshwar Foods Approves Increase in Authorised Capital
Home Business Stock market update: Sarveshwar Foods Approves Increase in Authorised Capital – Full Details Inside Stock market update: Sarveshwar Foods Approves Increase in Authorised Capital – Full Details Inside Sarveshwar Foods entered into collaborations with select Non-Banking Financial Companies (NBFCs) to improve access to finance for farmers. Stock market- File image- For Representational purpose Stock market update: Jammu-based FMCG and food processing company Sarveshwar Foods Limited has informed the stock exchanges that its Board of Directors has approved a proposal to increase the company's authorised share capital. As per the regulatory filing, the board has cleared a resolution to raise the authorised capital from ₹120 crore to ₹160 crore, marking a significant step towards enhancing the company's financial flexibility. The proposed change will also involve an amendment to the company's Memorandum of Association (MoA) to replace the existing Clause V with the updated clause, subject to shareholder approval. 'Approved increase in authorised capital of the Company from ₹120,00,00,000 (Rupees One Hundred and Twenty Crores only), consisting of 120,00,00,000 equity shares of Re.1/- each, to ₹160,00,00,000 (Rupees One Hundred and Sixty Crores only), consisting of 160,00,00,000 equity shares of Re.1/- each, subject to members' approval,' the filing stated. Strategic Partnerships with NBFCs In a strategic move announced last year, Sarveshwar Foods entered into collaborations with select Non-Banking Financial Companies (NBFCs) to improve access to finance for farmers. The company is acting as a facilitator, linking farmers with NBFCs to support agricultural productivity and financial inclusion. Importantly, the financing arrangements are entirely between the NBFCs and the farmers, with no financial obligation or recourse to Sarveshwar Foods. Stock Market Update On the broader market front, Indian benchmark indices rebounded sharply on Wednesday following a heavy sell-off in the previous session. Investor sentiment was buoyed by strong buying in banking and blue-chip stocks, alongside positive cues from Asian markets. While BSE Sensex surged 835.2 points (1.02%) to 82,021.64, the NSE Nifty gained 262.3 points (1.06%) to reach 24,946.20. Top gainers from the Sensex pack included Sun Pharma, Bajaj Finance, UltraTech Cement, Mahindra & Mahindra, Bajaj Finserv, Tech Mahindra, HDFC Bank, and Tata Motors. For breaking news and live news updates, like us on Facebook or follow us on Twitter and Instagram. Read more on Latest Business News on More Stories
