NBFCs show mixed trend on BSE after RBI tightened norms

Shares of non-banking financial companies (NBFCs) showed a mixed trend on the BSE today after the RBI tightened norms for these firms by requiring them to have a much stronger capital base.
SREI Infrastructure Finance tumbled 5.95 per cent, while Religare Enterprises fell by 2.48 per cent on the BSE.
On the other hand, shares of IDFC rose by 3 per cent, while LIC Housing Finance was up 3 per cent.
As per the latest directives announced yesterday, RBI has raised the limit for NBFCs to maintain the Net Owned Fund (NOF) requirement to Rs 2 crore.
At present, the NOF requirement is Rs 25 lakh. In a phased manner, the NBFCs would be required to raise it to Rs 1 crore by March 2016 and to further double it to Rs 2 crore by 2017, the RBI said.

The move comes at a time when thousands of companies, including various small entities and some large ones, have been under the scanner for illicit fund-raising activities across the country.
In India, total assets being managed by the financial sector is estimated at USD 2.8 trillion, out of which over USD 300 billion are with NBFCs.
With a view to streamline the regulations for the NBFC space, RBI said it would cancel the registration if the companies fail to adhere to norms, starting April 1, 2015 in a phased manner, as against the current practice of 'temporary suspension' of Certificate of Registration (CoR).