Stocks of various NBFCs have shown tremendous growth of up to 120% in the past year. This comes at a crucial time when a particular NBFC is going through a crisis situation. As the Infrastructure Leasing & Financial Services (IL&FS) declares dried liquidity, these NBFCs are giving reasons for people to trust them.
Non-Banking Financial Companies (NBFCs) are private financial and lending institutions which do not have a banking license. They are not regulated by any bank regulatory agency and are monitored by the Reserve Bank of India (RBI) itself. NBFCs provide financial services like investment, education loans and market brokering.
Despite the ongoing pressure, NBFC stocks have shown a growth of 30-120 percent in the last 1 year. Bajaj Finserv Education Loan also showed a growth of 30.5% in the previous year. This owes to the various stringent steps which these financial institutions are taking to fight the crisis like:
Recalibrating Balance Sheets
Limiting Credit Risks
Combating Liquidity Cycles
Even the Government of India is delivering its best help to these institutions as Finance Minister Nirmala Sitharaman announced support to them in her maiden budget speech. The government will now be making a 10% loss investment in the pool of NBFC loans.
NBFCs are known to offer a lot of attractive schemes in order to fetch customers which otherwise would opt for the traditional banks. Some of them are listed below.
InCred Education Loan asks for no kind of security and also hasn’t kept any age limit criterion.
Auxilo Education Loan scheme hasn’t kept any upper cap on the loan limit.
Avanse Education Loan covers up to 75% of your living cost.
Bajaj Finserv Education Loan approves your loan in a mere 5 minutes time.
Tata Capital Education Loan takes only 72 hours to completely disburse your education loan.
Fullerton India Education Loan offers a repayment period up to 20 years while the rest offer up to 15 years.
Lenient Eligibility Criteria
Fewer Rules and Regulations
The government is also roping in public sector banks to lift these non-banking financial institutions. These banks will be directed to purchase the high-rated pool assets of those NBFCs which have demonstrated themselves to be financially sound. This is expected to reach the INR 1 lakh crore mark in the current financial year.
With things going right so far, it is expected that these companies will regain their old trust and get strong. More people are expected to flow back to them as NBFCs play an important role in managing the loads on banks.