Also the ticket size of these SFBs is very low because of their MFI nature. RBI has a cap on the MFI loans, which is 1.25 Lakhs. That too over a course of borrowing cycles. Mostly, the MFI loans have a ticket size of Rs. 30,000.
Even in the previous post you had classified some of the NBFCs like MFIs as non systemically important but that depends on the size of the NBFC right? Any NBFC with assets > 500 Cr will become Systemically Important by default. That is my understanding. Please correct me if I am wrong.
NBFCs whose asset size is of ₹ 500 cr or more as per last audited balance sheet are considered as systemically important NBFCs. The rationale for such classification is that the activities of such NBFCs will have a bearing on the financial stability of the overall economy.
Ah, I didn't know that AU was AFC and not MFI. RBI doesn't really go into bank-specific details and multiple sources confirmed AU as a MFI. Will check AU history.
If possible please cover MSME lenders both from unlisted space like five star, vistaar and listed space... like NBFCs shriram city, AU , City union bank.. everyone says they are in MSME but I am sure there are various differences....
Advances ROI of all SFB are at higher side ; their will huge spread in the actual deposit rate offered to customer and lending rate ; is it will be advantage coming to overall margins ;
Will this SFB had scope of conversation to full scale schedule banks and universal banks
Please write detailed article on RBI vs Uday Kotak for maximum permissible stake in Kotak Mahindra Bank (from the very beginning till the end judgement)
If not possible for you, please share some links that you may have of any other platform's
Also the ticket size of these SFBs is very low because of their MFI nature. RBI has a cap on the MFI loans, which is 1.25 Lakhs. That too over a course of borrowing cycles. Mostly, the MFI loans have a ticket size of Rs. 30,000.
Even in the previous post you had classified some of the NBFCs like MFIs as non systemically important but that depends on the size of the NBFC right? Any NBFC with assets > 500 Cr will become Systemically Important by default. That is my understanding. Please correct me if I am wrong.
The recent RBI publication did not make it clear. Will have to check the appropriate notification.
8. What are systemically important NBFCs?
NBFCs whose asset size is of ₹ 500 cr or more as per last audited balance sheet are considered as systemically important NBFCs. The rationale for such classification is that the activities of such NBFCs will have a bearing on the financial stability of the overall economy.
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=92
Good one again. Just one observation. AU was a NBFC-AFC and not NBFC-MFI.
NBFCs are categorized as:
a) in terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs
b) non deposit taking NBFCs by their size into systemically important (> 500 Cr) and other non-deposit holding companies (NBFC-NDSI and NBFC-ND) and
c) by the kind of activity they conduct. Within this broad categorization the different types of NBFCs are as follows:
1 - Asset Finance Company (AFC)
2 - Investment Company (IC)
3 - Loan Company (LC)
4 - Infrastructure Finance Company (IFC)
5 - Systemically Important Core Investment Company (CIC-ND-SI)
6 - Infrastructure Debt Fund
7 - MFI
8 - Factors
9 - Mortgage Guarantee Companies (MGC)
10 - NBFC- Non-Operative Financial Holding Company (NOFHC)
11 - HFC
12 - AA
13 - P2P
Ah, I didn't know that AU was AFC and not MFI. RBI doesn't really go into bank-specific details and multiple sources confirmed AU as a MFI. Will check AU history.
And if you check the sector wise exposure in Suryoday RHP, AU has zero exposure in Micro Finance.
I have studied AU inside out and can confirm that they were AFCs.
And, the first 3 categories - AFC, IC and LC - RBI has combined them and call it NBFC - Investment and Credit Company (NBFC-ICC)
https://www.rbi.org.in/Scripts/BS_NBFCNotificationView.aspx?Id=11483
Good coverage onSFB health
If possible please cover MSME lenders both from unlisted space like five star, vistaar and listed space... like NBFCs shriram city, AU , City union bank.. everyone says they are in MSME but I am sure there are various differences....
Advances ROI of all SFB are at higher side ; their will huge spread in the actual deposit rate offered to customer and lending rate ; is it will be advantage coming to overall margins ;
Will this SFB had scope of conversation to full scale schedule banks and universal banks
Hi,
Please write detailed article on RBI vs Uday Kotak for maximum permissible stake in Kotak Mahindra Bank (from the very beginning till the end judgement)
If not possible for you, please share some links that you may have of any other platform's
Thanks in advance.
Hi Gaurav, I have already written about this. Here you go: https://www.bankonbasak.com/p/2-weekly-report-june-1-6.