Bankers said that such refinancing of debt for large companies has now increased and these companies are able to bring down the interest by as much as 100 bps.
However, the big player in refinancing is the countrys largest lender, State Bank of India.
With the lowest base rate at 9.75%, SBI has been approached by many companies that are aiming at refinancing their loans taken from other banks. In comparison, the base rate of Bank of India and Union Bank of India is at 10% each, while Punjab National Bank and Bank of Baroda stand at 10.25% each.
We refinanced about R8,000 crore in April-June," said Arundhati Bhattacharya, managing director and chief executive officer of State Bank of India.
Bankers said that such refinancing of loans has been only in the case of large companies that have AAA rating.
We have not participated in any refinance so far, But we did receive proposals for refinancing," said K Subramanyam, executive director at Union Bank Of India.
The interest cost saving is on case-to-case basis but companies can save up to 100 bps," said HSU Kamath, chairman and managing director at Vijaya Bank.
The head of a public sector bank agreed that as the management in a bank changes, big customers tend to ask for better terms of loans. Old set of bankers are leaving and a new set of bankers are coming. During this course, the pricing gets whittled down," he said.