Select NBFCs gain after RBI extends time to set up banks

Select non-banking financial companies which are likely to foray into the banking space gained in early trades today after the Reserve Bank of India on Monday allowed new banking licensees to set up banks.

The central bank on Monday said applicants getting permits to set up new banks would have to do so within 18 months. The earlier guidelines said aspirants would get a year after in-principle approval to do so, failing which the licences were to be withdrawn.

The sources said most of the queries pertained to the non-operative financial holding company (NOFHC) structure, made mandatory by RBI. It will allow the aspirants to set up a holding company after giving in-principle approval.

Mahindra & Mahindra Financial Services was up 1.5%, L&T Finance Holdings was up 3.7%, SREI Infra Finance was up 1.5% and LIC Housing Finance was marginally up in early trades.