bank-nbfc-analysislisted

# Banks and NBFCs (India) For a lender, debt is raw material, not financing. That single fact invalidates most of the standard toolkit: EBITDA is meaningless, enterprise value is meaningless, and FCFF is meaningless. Work with equity-side metrics only. **Never use on a lender:** EV/EBITDA, EV/Sales, net debt, FCFF-based DCF, Altman Z-Score (manufacturing variant), working capital cycle. **Use instead:** RoA and RoE decomposition, P/ABV, residual income / excess return models, dividend discount, and asset-quality trend analysis. ## Step 1 — Know which regime the entity sits in | Entity type | Regulator | Key regime | |---|---|---| | Scheduled commercial bank | RBI | Basel III capital, IRACP norms, CRR/SLR, PSL targets, LCR/NSFR | | Small finance bank | RBI | Higher PSL requirement, priority lending focus | | NBFC | RBI | Scale-Based Regulation: Base, Middle, Upper and Top Layers, with progressively stricter norms | | Housing finance company | RBI (regulation), NHB (supervision role) | HFC-specific exposure and principal-business criteria | | NBFC-MFI | RBI | Microfinance directions — household income cap, indebtedness limits, and a cap on repayment obligations as a share of household income | Scale-Based Regulation matters: an NBFC classified in the **Upper Layer** faces bank-like requirements including a CRAR floor, common equity tier-1 requirement, large-exposure norms, and mandatory listing within a defined period. Check the RBI's published NBFC-UL list for the curren