SKS Microfinance scrip soar 13% on RBI's move

Shares of SKS Microfinance today advanced by 13 per cent in the morning trade on the Bombay Stock Exchange (BSE), buoyed by relaxed restructuring guidelines issued by the Reserve Bank of India yesterday.

The central bank had yesterday relaxed debt restructuring norms for the microfinance sector to enable banks to provide liquidity support to the crisis-ridden micro finance institutions (MFIs).

Boosted by the move, shares of SKS shot up by 13 per cent to touch a month's high of Rs 756 on the BSE.

On the National Stock Exchange, the Hyderabad-based firm zoomed 13 per cent to an early high of Rs 757.

"The movement in the stock is news driven... The RBI's move will help the entire microfinance sector to strengthen their structure," Ashika Stock Brokers' research head, Paras Bothra, said.

An RBI committee had also suggested that MFIs be allowed to charge a maximum interest of 24 per cent on small loans which cannot exceed Rs 25,000.

The committee, headed by Reserve Bank's central board director Y H Malegam, also pitched for creation of a separate category of non-banking financial companies (NBFC-MFI) for the micro finance sector.

Meanwhile, the BSE barometer Sensex was trading at 18,860.19, down by 118.13 points at 10:06 hrs.