#silver-finance

bcg-rbih-financial-services-innovation-for-bharat

The Boston Consulting Group and the Reserve Bank Innovation Hub collaborated on a report titled \"Financial Services Innovation for Bharat,\" which aims to address the challenges faced by rural and semi-urban communities in India with regards to access to financial services. The report offers a framework for driving financial innovation in these areas, emphasizing the importance of desirability, viability, and feasibility. Six primary friction areas that prevent Bharat consumers from accessing financial services were identified, including limited financial knowledge, high expenses, inadequate credit history, lack of awareness about schemes and subsidies, and limited trust in digital banking due to fraud risk. Financial institutions must adopt innovative strategies to address these obstacles, but they face constraints such as regulatory uncertainties and limited funding.

CRISIL Report on NBFCs

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Workshop on RBI Circular on Regulatory Measures in Consumer Credit by Banks & NBFCs

A workshop on the RBI circular on regulatory measures in consumer credit by banks and NBFCs was held to discuss the implications of the circular. The circular was a response to concerns about the increasing growth of consumer credit and aimed to address the potential risks associated with it. The circular introduced four measures, including an increase in risk weights applicable to consumer credit for banks and NBFCs, an increase in risk weights for bank lending to NBFCs, and the establishment of sectoral limits for consumer credit. The circular had an immediate implementation deadline of February 2024. The workshop also discussed the definition of consumer credit and the exclusions from the risk weights.

India Finance Report 2023

The NBFC ecosystem in India has evolved over the years, and the Reserve Bank of India and the Government of India's policies have helped the sector emerge stronger and more resilient than before. The CAFRAL_Report aims to highlight the unique opportunities and challenges that confront NBFCs in the Indian context, with a focus on financial inclusion, interlinkages between the nonbanking sector and other segments of the financial system, digitalization and its impact, and emerging balance of risks for the sector. The report is organized into four chapters and is sensitive to the significant heterogeneity within NBFCs, issues in complementarity and competitiveness vis-à-vis the traditional banking sector, and the growing synergies between NBFCs and FinTech, particularly in reaching out to sections of society that get excluded from formal credit markets.

Co-Lending

Co-lending is a collaborative approach where lenders partner to extend their lending capabilities and reach. This concept is gaining popularity, particularly in priority sector lending, where banks and NBFCs are entering into co-lending arrangements. The Reserve Bank of India has introduced guidelines for co-lending, which provide a regulatory framework for such partnerships. Co-lending can be discretionary or non-discretionary, and the risk and rewards of the partnership should be shared between the co-lenders. The co-lending model offers benefits for both banks and NBFCs, allowing them to leverage their respective strengths and expand their lending portfolios.

MS - Gold Lenders

Gold lending has been a business with supernormal ROE but low growth – and competition from banks is rising. Diversification is the way out, and Overweight-rated Manappuram looks better positioned than Muthoot both cyclically and structurally. Valuation multiples are also attractive for Manappuram.

NBFCs CEOs Discussion: Electrifying Co-Lending

The document discusses a panel discussion among CEOs of non-banking financial companies (NBFCs) on the topic of co-lending. The CEOs highlight that co-lending between banks and NBFCs has emerged out of a necessity, as banks were unable to fulfill their priority sector lending (PSL) requirements. The co-lending model allows NBFCs to leverage the balance sheet of banks and generate additional profitability. The CEOs believe that the co-lending model is still in its early stages but shows promise for both NBFCs and banks in terms of capital efficiency and reaching out to the micro and small enterprise sector.

Indian-Gold-Loan-Market