SBI Card share price, RBI credit card rules, stock market today:  Shares of SBI Cards and Payment Services in Monday’s session (November 20) opened higher by 1.62 per cent at Rs 741.95 apiece on the BSE. In the previous session, after the RBI’s crackdown on unsecured personal loans and new credit norms, shares of the credit card company ended over 5 per cent lower at Rs 732.15 per share.

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Given the RBI’s new directives on unsecured loans, the company’s capital adequacy ratio will reduce by up to 4 per cent and in case the need arises, the company will augment its Tier 2 capital and there is no need to raise equity, SBI Card said.

"We do not foresee a significant impact on our cost of funds during this financial year. It may increase marginally in absolute terms on an annualised basis. We would like to highlight that, as a large and well-capitalised NBFC, the new rules will open opportunities for good-quality customer acquisition, SBI Card said in its exchange filing.

Domestic brokerage Motilal Oswal is of the view that the increase in risk weight on CC/PL/consumer durable loans by 25 per cent will likely result in a 30-85 basis point impact on capital ratios, barring SBI Card. Further, it says the credit card company is the most vulnerable, with a 416 bp impact. One bp, or basis point, is one-hundredth of a percentage point.

Brokerage views on the counter post-RBI’s directive

Morgan Stanley is bullish on the counter and has given it an overweight rating. The foreign brokerage has set a target of Rs 950, implying potential gains of 23 per cent. The brokerage said the impact of RBI measures on the Tier 1 ratio will not constrain the company’s business, while the impact on the cost of funds should be manageable. The brokerage sees a lower risk of the company having to sharply slow unsecured credit growth.

SBI Card has been an underperformer, with a YTD return of -7.6 per cent. In contrast, Nifty Financial Services during the same window has risen by 3 per cent.