views on (Gold Loan NBFC Sector) Budget Expectations for July 23 by Umesh Mohanan, ED & CEO, Indel Money
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Below the views on (Gold Loan NBFC Sector) Budget Expectations for July 23 by Umesh Mohanan, ED & CEO, Indel Money
“Gold loan NBFCs are mainly looking at whether there will be any cut or relaxation in the gold import duty in the Union Budget-2024-25. Gold imports now attract 15% duty. Any such move will lead to a crash in gold price in the domestic market, which bodes ill for the gold loan business.
RBI’s curbs on providing unsecured retail loans by banks and NBFCs are certainly boosting the gold loan business. However, in the case of other NBFCs, a reduction in bank lending to the shadow banks, following the RBI directive in November last year, is a serious concern. The latest RBI Financial Stability Report highlights that, in terms of net borrowing, NBFCs are the largest participants in the banking system and a major part of their borrowings come from the Scheduled Commercial Banks (SCB). The central bank is of the opinion that the caution in bank lending to the NBFCs should continue. In such a scenario, in the upcoming Budget, they are demanding the creation of a dedicated refinance agency like SIDBI for NBFCs to reduce their dependence on the SCBs, maintain liquidity and drive loan growth. Further, NBFCs are also demanding harmonisation of rules and regulations with the banks, especially in the areas of recovery and taxation. Currently, there is no level-playing field, and the banks are at an advantageous position compared with the shadow banks.”
Above views are of the author and not of the website kindly read disclaimer
