Jio Financial tweaks plans after RBI move on unsecured lending
Bajaj Finance by launching Jio Financial Services, with the venture resulting from the demerger of Reliance’s financial services business. It has already launched personal loans for the salaried and self-employed in Mumbai, besides consumer durable loans across 300 stores in India. The services are also available on the MyJio app.
Banks and NBFCs are going slow on unsecured consumer lending after RBI increased risk weights on unsecured loans last year. Analysts expect growth in unsecured loans, which constitute 12-13% of NBFC credit, to moderate in 2024 due to rising risks, higher risk weights, and the central bank’s nudge to lenders to exercise caution towards this segment. For NBFCs, unsecured personal loans grew 41% year-on-year in the September quarter and accounted for 22% of incremental growth on a bottom-up basis.
“We expect loans growth at NBFCs / HFCs to moderate to 16-17% over FY25-26E vs. 18-19% in FY24e as growth in unsecured loans moderate," Jeffries said in another report dated 2 January. Jio Financial Services reported a 56% sequential drop in net profit to ₹294 crore in the October-December quarter owing to the absence of dividend income on shares held in Reliance Industries and an increase in operational expenses on employee addition, capacity building and corporate social responsibility expenses.
In the previous, July-September, quarter, the NBFC saw net profits of ₹668 crore on account of dividend income worth ₹371 crore. The company’s net interest income grew 44.6% sequentially to ₹269 crore at the end of the December quarter compared with ₹186 crore at the end of the September quarter. Other income, however, fell by 65.6% to ₹145 crore at the end of the December quarter.Milestone Alert!
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