Flush with funds, SBI in October 2018 had tripled its target to buy good quality retail asset portfolio from finance companies to Rs 450 billion from earlier target of Rs 150 billion.
State
Bank of India has acquired retail loans worth Rs 27,000 crore
including Rs 10,000 crore worth of micro-finance loans from
non-banking finance entities in 2018-19.
India's
largest lender SBI in October 2018 had indicated it would acquire up
to Rs 45,000 crore from finance companies that are facing a liquidity
crunch after IL&FS
group entities defaulted on repayments. This provided much-needed
funding support to finance companies.
P
K Gupta, managing director (digital and retail banking) said the bank
has sanctioned Rs 27,000 crore of loans which were to be bought from
finance companies. Of this, work for over Rs 19,500 crore has already
has been done. The processing for over Rs 6,000 crore is underway.
These
assets comprising mortgage loans and microfinance credit etc have
been acquired through the direct assignment route. They would be part
of the loans book, unlike securitization where banks invest in the
pass through certificates for underlying loans.
SBI
got an opportunity to expand its loan book by purchasing good quality
portfolio assets at attractive rates.
The
yield on loan portfolio ranges between 8.75 per cent to 10.5 per cent
depending on the profile of the asset pool and competition, SBI
executives said.
The
loan purchase was for expanding the book but not at the cost of the
growing balance sheet organically through branch network, SBI
chairman Rajnish Kumar had said.
The
credit to deposit ratio of SBI stood at around 68.67 per cent at end
of December 2018. Gross Advances at the Whole Bank level registered a
growth of 11.99 per cent from Rs 19.24 trillion as on December 2017
to Rs 21.55 trillion as on December 2018.
Bank
deposits increased 6.76 per cent from Rs 26.51 trillion in December
2017 to Rs 28.30 trillion in December 2018.
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