Shares of Bajaj Finance experienced a significant downturn on August 7, 2026, falling by 5.55% to Rs 1086 from its previous close of Rs 1149.90. This plunge, which saw the company's market capitalization slip to Rs 6.85 lakh crore, represents the biggest intraday fall for the stock in four months.
RBI Proposal Triggers Market Reaction
The sharp decline was primarily attributed to a recent development from the Reserve Bank of India (RBI). On August 6, 2026 (Thursday), the RBI proposed a significant amendment to its credit facilities guidelines, which could impact non-banking finance companies (NBFCs) like Bajaj Finance.
Under the draft amendment, the RBI aims to prohibit NBFCs from offering revolving credit facilities. Instead, these financial institutions would only be permitted to extend term loans.
Understanding Revolving Credit vs. Term Loans
- Revolving Credit Facility: This is a flexible lending arrangement that allows a borrower to draw money up to a fixed limit, repay it, and then borrow again as needed. It provides ongoing access to funds.
- Term Loans: These are typically loans with a fixed repayment schedule over a specified period, where the principal amount cannot be re-borrowed once repaid.
The potential restriction on revolving credit facilities is seen as a major regulatory shift that could alter the business model and revenue streams for many NBFCs, leading to investor concern and the subsequent sell-off in Bajaj Finance shares.