RBL Bank shares dive 9% as RBI tightens consumer lending rules

Shares of RBL Bank Ltd fell sharply in Friday's trade, pausing their five-day winning run. The stock cracked 9.45 per cent to hit a day low of Rs 230.55 over its previous close of Rs 254.60. Today's fall in the share price came after Reserve Bank of India (RBI) tightened rules for personal loans and credit cards to curb sharp growth in the riskier lending products.

The Reserve Bank, concerned by the surge in consumer loans, has increased risk weights on retail loans. Banks and shadow lenders (NBFCs) would now need to set aside more capital for every loan to cover for the likelihood of bad loans, making the loans costlier and potentially curbing growth.

On technical setup, immediate support on the counter could be seen at Rs 230, followed by Rs 225 and Rs 220 levels.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "RBL Bank has seen an intense fall from its 52-week highs towards the short-term moving averages on daily timeframe. The counter hovers in a broad range starting from Rs 210-250 sub-zone. For now, Rs 220 is likely to provide cushion, while sacrosanct support lies around Rs 210. On the higher end, a breakout above the aforementioned resistance zone could only trigger fresh additions in the counter."

"RBL Bank is bearish on daily charts with immediate resistance at Rs 242.5. A daily close below support of Rs 230 could lead to a target of Rs 218 in the near term," said AR Ramachandran from Tips2trades.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Since the last 3–4 months, the counter has been trading in the range of Rs 260–220, resulting in triple top formation on a daily scale. As we advance, sideways movement is expected for the coming few days. Support is expected near Rs 225 and resistance is seen near 250."

The counter's 14-day relative strength index (RSI) came at 48.43. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 14.41 against a price-to-book (P/B) value of 1.08.

The scrip has an analyst target price of Rs 256, Trendlyne data showed, suggesting a potential upside of 8 per cent in a year. It has a one-year beta of 0.2, indicating low volatility on the counter.

On BSE, around 11.76 lakh shares were last seen changing hands today. The figure was higher than the two-week average volume of 3.86 lakh shares. Turnover on the counter came at Rs 27.76 crore, commanding a market capitalisation (m-cap) of Rs 14,433.44 crore.

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