Is New Banking Licences Party is Over?

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It appears that the euphoria which had surrounded the companies like L&T Finance, Mahindra & Mahindra Financial Services, Shriram Transport Finance and LIC Housing Finance appears to be over in the short term as the biggest factor which can hold these companies from going all out are enumerated below:
  • The entities that receive the licenses will have to meet PSL (priority sector lending) norms. PSL loans, given their risky nature are seen as a cost burden due to the provision requirement.
  • Moreover 25% of the bank's branches have to be opened in unbanked sectors. Currently, a large number of non-banking finance companies have less than 10% presence in rural areas.
It is good that RBI has made their guidelines clear at the beginning as now only serious players will get into the segment and will not be in a hurry like telecom sector companies who wanted to get the circles and than sell it for a profit. If lookign to get benefitted with banking sector stocks than check out our Jackpot tip as we make daily money trading with banking sector stocks.

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