No-liquidity stress seen for NBFC-MFIs right now: Bandhan Bank CEO Chandra Shekhar Ghosh

By: |
Kolkata | Published: May 30, 2019 2:30:35 AM

Bandhan Bank’s exposure to NBFC-MFI sector stood at Rs 2,333 crore at the end of the last fiscal. As on March 31, 2019, its loan book stood at Rs 44,776 crore.

bandhan bank, banking sector, banking industryBandhan Bank managing director
& CEO Chandra Shekhar Ghosh

Amid the Reserve Bank of India’s proposal to impose strict liquidity norms on non-banking financial companies (NBFCs), private-sector lender Bandhan Bank on Wednesday said it has not been witnessing any liquidity stress scenario for the NBFC-MFI (microfinance institution) sector, and it is currently lending to NBFC-MFIs “comfortably”.

“For the NBFC-MFI sector, we are not seeing any liquidity crunch at this moment. An NBFC-MFI has the ability to generate cash flows from its daily transactions. Because repayments of loans from its customers are coming almost everyday,” Bandhan Bank MD & CEO Chandra Shekhar Ghosh told FE.

“We are providing fresh credit facilities to NBFC-MFIs as we know their business models and cash flows very well. We have a team which can understand the nitty-gritty of this business very well. So, that is the advantage for Bandhan Bank. We are not likely to lend to all NBFC-MFIs, we are lending to those which are good, based on internal and external ratings. Other than NBFC-MFIs, some NBFCs are also doing very good business,” Ghosh said.

When asked whether his bank would be cautious on taking fresh exposure to the NBFC sector, he said: “It is not correct to restrict fresh lending to the sector as a whole due to defaults in one or two cases. Banks should be more cautious, but not panic-stricken. We are cautious. We are currently not lending to big NBFCs, but are taking fresh exposures to small and medium NBFCs, based on their ratings.”

Bandhan Bank’s exposure to NBFC-MFI sector stood at Rs 2,333 crore at the end of the last fiscal. As on March 31, 2019, its loan book stood at Rs 44,776 crore.

For the proposed acquisition of Gruh Finance, the affordable housing finance arm of HDFC Ltd, the Kolkata-based bank is at present awaiting approvals from NCLT Kolkata and Ahmedabad benches. The proposed takeover, in a share-swap deal, has already got approvals from the Competition Commission of India (CCI), RBI and Sebi.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1PNB to mop up Rs 10K cr from non-core asset sale, rights issue, write-back
2RBI likely to keep repo rate unchanged in June: Report
3SBI to sell Rs 230-crore NPAs with up to 79% haircut