SBI: Can buy up to Rs30,000cr more of NBFC loans
State Bank of India, the country’s largest lender, has extended its support to the beleaguered non-bank lenders. Initially, the bank had planned for a growth of Rs15,000cr through portfolio purchase. Now, it has enhanced its target to double the previous amount.
Meanwhile, as per the bank’s internal assessment, it may have the opportunity to buy additional portfolio in the Rs20,000-30,000cr range.
NBFCs usually sell off part of their loan portfolios after they have held it for a stipulated amount of time. Banks then buy these portfolios to show growth or to meet priority sector lending requirements.
SBI’s stance comes on the back of a rumored cash-crunch situation plaguing the NBFCs making it difficult for them to raise funds from the market. Moreover, it’s a good commercial opportunity for the bank to increase its loan portfolio as NBFC assets are available at good rates.