Higher-rated NBFCs likely to gain more from RBI relief
risk weightage for bank loans, since capital to be assigned for AAA rated NBFCs will halve to 20% from 45%.
Easier access to funds and lower costs could mean NBFCs could save 25-50 basis points on bank loans due to lower banking risk weightages for the sector. One basis point is 0.01 percentage point.
Increase in bank risk weights on loans for AAA NBFCs was the sharpest doubling to 45% from 20% earlier, while those for AA rated NBFCs the rise was off a higher base of 30% to 55% and for A rated NBFCs from 50% to 75% earlier.
Higher risk weights require banks to set aside more capital to provide cover against such loans.
Jairam Sridharan, MD of Piramal Capital and Housing Finance, said with the cost of capital for banks likely to come down, it is fair to assume that bank funding for NBFCs will be cheaper from the next fiscal year.
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