Superseding boards of two Srei companies not to roil markets, say bankers

The RBI on Monday superseded the boards of Srei Infrastructure Finance and Srei Equipment Finance

Superseding the boards of two non-banking financial companies (NBFCs) in the Srei group will neither create liquidity challenges for sound entities, nor build systemic crises because the markets have factored in the problems with the Kolkata-based firms.

Such regulatory steps will help in making the NBFC space more robust, bankers and market experts said.

The action should have begun earlier because the Reserve Bank of India (RBI) had done a special audit last financial year and asked the group to make provisions for assets considered stressed, analysts said.

Till now the steps taken -- including superseding the boards -- are