RBI Action on IIFL, JM Financial: Experts see near-term overhang on NBFC stocks

"We will have to differentiate some of these companies. I do agree that in the haste of making the business grow faster, some of these companies have probably compromised some levels of compliances. And that's where the investor should be worried about. I would think that the larger companies which have got relatively stable infrastructure should not be into any kind of a problem," said Deven Choksey, MD, DRChoksey Finserv.

On the contrary, Choksey feels that companies like Bajaj Finance would continue to grow at the rate of 30% plus because of the higher amount of focus on the retail consumers at the same time.

The RBI has asked JM Financial Products to cease and desist with immediate effect from any form of financing against shares and debentures. The central bank observed that the company repeatedly helped a group of its customers to bid for various IPO and NCD offerings by using loaned funds.

Besides other observations, the central bank also found serious governance issues on part of the company.

On March 4, the RBI had asked IIFL Finance to stop sanctioning or disbursing gold loans after observing certain material supervisory concerns in the company's gold loan portfolio.

On Tuesday, the NBFC sought to assure investors that there were no governance or ethical lapses and that the company was taking "immediate and comprehensive steps" to address the central bank's concerns.

On January 31, the RBI had imposed business restrictions on Paytm Payments Bank, including a ban on accepting fresh deposits and undertaking credit transactions after February 29. On February 16, the deadline was extended to March 15.