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Last Updated : Jun 14, 2019 08:46 PM IST | Source: PTI

SBI says it contiunes to lend to NBFC

The bank does not consider the crisis plaguing the shadow banks are grave as only one or two of them are severely impacted, said a top bank official.

 
 
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Amid the growing fears of defaults by non-banking finance companies, the largest lender State Bank of India June 14 said it will continue to funds to the sector as it feels the problems facing the industry are not very grave and system-wide.

The bank does not consider the crisis plaguing the shadow banks are grave as only one or two of them are severely impacted, said a top bank official.

"SBI is lending to NBFCs and we will continue to do so...Our decision is based on risk perception that we have on a particular entity. We have not stopped lending to NBFCs at all," managing director Arijit Basu told reporters on the sidelined of a banking summit organised by industry lobby IMC.

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Last week, SBI had said it had been closely monitoring its exposures to NBFCs for the past many months and was taking appropriate measures to safeguard its interest.

"The overall quality of the NBFC asset portfolio in our books continues to be good. We have already included the stressed NBFC accounts in our estimate for slippages and loan loss provisions for the current financial year," SBI had said without quantifying it.

As of March 2019, SBI had an exposure of Rs 1.87 lakh crore to the NBFC sector, which has been in trouble since IL&FS went belly up last September.

He said both RBI and government have taken a few steps to address the issues and are contemplating more measures.

It could be noted that Dewan Housing Finance had defaulted on bond repayments on June 4, which led to the downgrade of its Rs 850-crore commercial papers to D from A4 by Icra and Crisil.

On June 11, the mortgage lender, however, said it paid Rs 962 crore towards interest payment on debt instruments which fell due on June 4, and met the seven-day "cure period" to pay off its obligation.

DHFL paid the interest towards a total of 12 NCDs amounting to Rs 961.95 crore which were due for payment on June 4.

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First Published on Jun 14, 2019 08:40 pm
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