Shares of financial service companies surged as much as 9% on the Bombay Stock Exchange (BSE) on Monday following the Reserve Bank of India's announcement of new rules for applicants late on Friday.
While Religare Enterprises surged 9% to R294, L&T Finance Holdings jumped 5%, Srei Infrastructure Finance rose 4%, Bajaj Finserv went up by 3.4% and LIC Housing Finance jumped 3% on the BSE.
While dozens of companies are expected to apply for licences by the July 1 deadline, the banking sector regulator is expected to be very selective.
"We expect a large number of applications from most large business houses and NBFCs (non-banking finance companies). With limited licenses on offer, the screening process will assume importance," said Nischint Chawathe, analyst, Kotak Securities.