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  1. IL&FS default: SBI offers to buy Rs 45,000 crore worth assets from cash-strapped NBFCs; here’s why

IL&FS default: SBI offers to buy Rs 45,000 crore worth assets from cash-strapped NBFCs; here’s why

Hit by a series of defaults by debt-ridden IL&FS group, the largest lender in the country SBI has offered to purchase good quality assets worth Rs 45,000 crore from NBFCs.

By: | Published: October 10, 2018 10:09 AM
SBI says that the purchase of good assets from NBFCs provides it an opportunity to increase the loan portfolio at attractive rates

Hit by a series of defaults by debt-ridden IL&FS group, largest lender in the country SBI has offered to purchase good quality assets worth Rs 45,000 crore from NBFCs. “SBI steps up target for purchase of good quality portfolio of assets from NBFCs, as it believes that there is good opportunity to expand its loan portfolio at attractive rates. The bank is looking for opportunities both in priority and non-priority sectors,” The Indian Express reported citing SBI. The public sector lender which already plans to purchase assets worth Rs 15,000 crore has now planned to purchase additional assets of up to Rs 30,000 crore.

The bank says that the purchase of good assets from NBFCs provides it an opportunity to increase the loan portfolio at attractive rates benefiting both SBI and NBFC sector. The crisis-hit sector will receive more liquidity with its purchase, it added.

There should not exist any concern on the liquidity position at NBFCs, SBI Chairman Rajnish Kumar. The latest move by the bank comes as NBFCs said they are under pressure over severe liquidity squeeze ahead of the impending festive season as they are not being able to raise funds from the commercial sector and  corporate debt market at viable rates.

“Since last Monday, we have seen banks completely stop lending to our HFCs and NBFC even though such loans are backed by mortgages. This is leading to a situation where we are cash-strapped and it may affect lending, especially consumer loans ahead of the festive season,” he said.

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