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State Bank of India (SBI) is said to increase its portfolio purchase of loans from non-banking finance companies (NBFCs) to provide the much-required liquidity to the funds’ deprived sector, and concurrently fulfil its priority-sector obligations within the end of this year.
SBI released a statement stating, “The bank is looking for opportunities both in priority and non-priority sectors. The bank had initially planned for a growth of Rs. 15,000 crores through portfolio purchase during the current year, which is now being enhanced.”
The bank added, “As per the bank’s internal assessment, there may be an opportunity to buy an additional portfolio in the range of Rs 20,000 to Rs 30,000 crore.”
SBI’s Chief financial officer (CFO) Prashant Kumar said, “This will help us meet our priority-sector target and will also benefit some NBFCs that are looking for funds. With 66 per cent credit/ deposit ratio, we have sufficient liquidity and capital; so this is a good opportunity for us.”
According to the Central Bank rules, banks are needed to lend 40 per cent of their deposits to small businesses, agriculture and home loans under a certain threshold. SBI aims to buy these loans from NBFCs active in this space.
