INSUBCONTINENT EXCLUSIVE:
as markets evaluated the capital required by these institutions
Financials experienced significant losses, contributing to the downturn in major indices.Ratings agency S-P and an SBI report have said that
the capital requirement for banks would go up by 60 basis points (100 basis points equals 1 percentage point).According to SBI, the impact
of higher risk weightage on capital would be Rs 84,000 crore.Lenders will need to boost capital mop-up as RBI has termed them more risky and
directed them to hold 25% extra capital than before for consumer loans
According to analysts, banks with a higher share of consumer lending or NBFC loans are IDFC First Bank, Axis Bank, and HDFC Bank, followed
by SBI and ICICI Bank.Among finance companies, SBI Card was the worst impacted as its entire portfolio would be subject to higher risk
weightage, and its borrowing costs are also likely to rise
The other NBFCs with high exposure to consumer credit are Bajaj Finance and Poonawalla Fincorp.However, Poonawalla Fincorp said that it had
addressing any incipient financial stability risks in the system as such risks are coincident indicators
