Lending is a commoditized business. A consumer will ALWAYS choose a gold loan at 7% from a bank vs same loan from an NBFC at 10%. The NBFCs can never compete with banks on pricing (lending rates). As the country develops, services of banks (particularly private banks) will catch up with well run NBFCs. This means NBFCs business model will slowly collapse and most of them will either vanish or merge with some bank. Muthoot or bajaj, each and every one of them will meet the same fate. RBIs decision to grant banking license through SFBs had further accelerated this process. I am heavily invested in pvt banks and have no investment in any NBFC. As a veteran investor, I will suggest the same to everyone.
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