Bank Nifty Snaps 4-Day Losing Streak as RBI Rolls Back NBFC Loan Risk Weight Hike

By 5paisa 27 Feb 2025

Bank Nifty ends losing streak after RBI reverses NBFC loan risk weight hike. HDFC Bank, Axis Bank, IndusInd Bank, and IDFC First Bank lead the rally.

RBI’s policy reversal frees up capital for banks, boosting lending capacity. Small finance banks surge up to 4% in response.

The revised policy takes effect from April 1, 2025. Lower risk weights mean banks set aside less capital, improving loan growth.

Bank loan growth to NBFCs fell to 6.7% YoY in Dec 2024 from 15% last year due to earlier RBI restrictions. The reversal is expected to revive growth.

Banks like Bandhan Bank, RBL Bank, IDFC First Bank & IndusInd Bank will benefit most. Analysts expect improved liquidity & stronger loan growth ahead.

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