Even as foreign institutional investors (FIIs) continue to sell Indian equities relentlessly and global uncertainties mount, Zee Business Managing Editor Anil Singhvi looking at the sector-specific fundamentals is bullish on banks and non-banking financial companies. The market wizard believes the Reserve Bank of India's latest move of risk weight reduction for loans to NBFCs will augur well for both the banking as well as NBFC space.

Importantly, the expert is bullish on the two sectors even as Nifty has witnessed its fifth consecutive monthly loss after 28 years. Last in its longest losing run in 1996 spanning from July to November, Nifty nosedived 29 per cent, while in the current correction it has toppled nearly 13 per cent.

The bluechip Nifty50 index has been closing in the red for the last 15 trading sessions, with an intermittent gain of just 30 odd points or 0.13 per cent on a single day (February 17). Furthermore, it is closing below 23,000 levels for the last eight trading sessions. As of writing the copy, the index traded lower with a cut of 0.07 per cent at 22,531.

The move means that banks going forward will need to hold less capital against such loans.

It will have several implications including lower capital requirements for banks, cheaper financing for NBFC and microfinance institutions (MFIs), boosts to credit growth together with enhanced liquidity in the financial system, among others.

The decision by the banking regulator largely aligns with its goal to stimulate credit flow to small businesses, underserved sectors and rural borrowers, among others.

Singhvi held that banks including Bandhan Bank, RBL Bank, IDFC First Bank and IndusInd Bank are likely to emerge as the biggest beneficiary post this RBI's diktat.

Further, he recommended buying Bandhan Bank futures with a stop loss (SL) at Rs 133 and targets at Rs 138, Rs 140, and Rs 144. Similarly, for IDFC First Bank futures, he suggests a buy call with SL at Rs 58.50 and targets at Rs 59.50, Rs 60.50, and Rs 62.

Also Read: Anil Singhvi sees big opportunity in Bandhan Bank, IDFC First Bank; here's why

Singhvi opines that NBFCs such as Piramal Enterprises, IIFL Finance, Manappuram Finance will benefit from the move. In addition, it also sees credit card player SBI Card to also draw some benefit.