India’s largest lender the State Bank of India (SBI) is planning to purchase loan assets worth Rs 45,000 from Non-Banking Financial Companies (NBFCs) for offering liquidity to the sector and simultaneously fulfill its priority-sector obligations.
“The bank is looking for opportunities both in priority and non-priority sectors. The bank had initially planned for a growth of Rs 15,000 crore through portfolio purchase during the current year, which is now being enhanced,” said SBI in its official communiqué.
“As per the bank’s internal assessment, there may be an opportunity to buy an additional portfolio in the range of Rs 20,000 to Rs 30,000 crore,” the bank said.
Prashant Kumar, Chief financial officer (CFO) of SBI said the loans would largely be bought in the priority sector.
“This will help us meet our priority-sector target and will also benefit some NBFCs that are looking for funds. With 66 per cent credit/ deposit ratio, we have sufficient liquidity and capital; so this is a good opportunity for us,” Kumar added.
As per Reserve Bank of India (RBI) banks are mandated to lend 40 percent of their deposits to small businesses, agriculture and home loans under a certain threshold. SBI is planning to purchase these loans from NBFCs active in this category.
According to the industry sources, NBFCs are facing liquidity crunch after infrastructure financier IL&FS defaulted on multiple payments since late August.
