Market positive as guidelines on credit guarantee for NBFCs out: Avinash Singh, SBICAP Sec

There are still a lot of qualifying criteria within that but at the very top level, most of the NBFCs will qualify, says Avinash Singh, Equity Research Analyst, SBICAP Securities. Excerpts from an interview with ETNOW.

The finance ministry has issued guidelines for rolling out its budget announcement of offering Rs 1 trillion partial credit guarantee to public sector banks purchasing high-rated pooled assets of financially sound non-bank lenders. Do you think the stock market reaction is something which was captured way back when the proposal was tabled in the parliament?
Not exactly. When it was announced, there were many qualitative phrases in that statement like financially sound NBFCs with good portfolio. Of course, the market was sceptical about it, But now with the announcement coming in, it is being taken as a positive.

There are still a lot of qualifying criteria within that but at the very top level, most of the NBFCs will qualify. NBFCs which have got a good portfolio of retail loans and some SME portfolio, would be able to securitise. This move will probably address the issue of liquidity for the time being.