India's largest lender State Bank of India is currently reviewing its exposures to non-banking finance companies (NBFCs) and this review is expected to be completed within the next fortnight, a senior bank official said on Friday.
India’s largest lender State Bank of India is currently reviewing its exposures to non-banking finance companies (NBFCs) and this review is expected to be completed within the next fortnight, a senior bank official said on Friday.
This review process assumes significance as IL&FS, a major infrastructure financing and construction company, has sent shock waves through the country’s NBFC sector when it defaulted on some of its debt obligations in recent weeks.
“Our bank is at present reviewing exposures to non-banking finance companies. The bank is cautious on taking fresh exposures to the NBFCs,” a senior SBI official said on condition of anonymity.
Sujit Kumar Varma, deputy managing director (corporate accounts group), SBI, however, said the review of exposures was an ongoing process. “As per preliminary assessments there is no liquidity or asset liability mismatch seen in NBFCs,” Varma told reporters here on the sidelines of an event organised by CII. SBI has around Rs2-lakh-crore exposure to NBFCs, a majority of them are into housing and other retail finance. Varma said the state-run bank will continue to lend to the sector going forward, ruling out any ‘systemic risks’ or fear of liquidity crisis.
The deputy managing director said his bank was expecting that its corporate loan book to grow by nearly 6% year-on-year in this fiscal compared with around 3% in previous fiscal.