India's state-owned lenders, NBFCs fall after RBI's guidelines on project finance

Indian Renewable Energy Development Agency

06/05/2024 06:01

** India's state-owned lenders  .NIFTYPSU  drop 4.1% 
    ** Power Finance Corp  PWFC.NS , REC  RECM.NS  and IREDA
 INAR.NS  fall 4%-10%
    ** Reserve Bank of India's draft guidelines on project
finance proposes lenders set aside higher provisions for
under-construction infrastructure projects 
    ** Nomura says, "The draft provisioning requirements are
well above the current standard provision requirement of 0.4%,
and hence punitive toward project loans"
    ** Adds PSU banks have higher exposure to corporate, infra
loans and if new norms are implemented, it will materially
impact their medium-term loan growth outlooks
    ** CLSA says new norms to impact non-bank lenders like
PWFC's and RECM's impairment reserves
    ** PSU bank index is the top sectoral loser on the day;
Nifty 50 trading flat - LSEG data

 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))