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SBI's OTS scheme may have a ripple effect on NBFCs

Industry experts don't foresee a knee-jerk reaction from customers yet

Hamsini Karthik 

A few days ago when State Bank of India (SBI) announced a one-time settlement (OTS) scheme for tractor and farm equipment loans, it signalled that instalment collections may take some time to recover. While investors in non-banking finance companies (NBFCs) haven’t encountered a similar situation over the past few years, there are concerns whether SBI was setting the stage for more of such leeway. Election promises and demands in states such as Uttar Pradesh and Maharashtra, which favoured farm loan waiver, also increases concerns.  A senior executive of a private bank ...

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SBI's OTS scheme may have a ripple effect on NBFCs

Industry experts don't foresee a knee-jerk reaction from customers yet

A few days back when State Bank of India (SBI) announced a one-time settlement (OTS) scheme for tractor and farm equipment loans, it signalled that instalment collections may take some time to recover. While investors in non-banking finance companies (NBFCs) haven't encountered a similar situation over the last few years, there are concerns whether SBI was setting the stage for more of such leeway. Election promises and demands in states such as Uttar Pradesh and Maharashtra which favoured farm loan waiver also increases concerns. A senior executive of a private sector bank states that while a farm loan waiver looks unlikely as state governments don't have the money yet to compensate banks for the loans waived, schemes like SBI's OTS on farm and tractor equipment loans may tempt customers to negotiate with their NBFCs on similar lines. "If it was easy to interpret Reserve Bank of India's 60-day dispensation as loan waiver, OTS scheme may play more on customer sentiment," he states. ... A few days ago when State Bank of India (SBI) announced a one-time settlement (OTS) scheme for tractor and farm equipment loans, it signalled that instalment collections may take some time to recover. While investors in non-banking finance companies (NBFCs) haven’t encountered a similar situation over the past few years, there are concerns whether SBI was setting the stage for more of such leeway. Election promises and demands in states such as Uttar Pradesh and Maharashtra, which favoured farm loan waiver, also increases concerns.  A senior executive of a private bank ... image
Business Standard
177 22

SBI's OTS scheme may have a ripple effect on NBFCs

Industry experts don't foresee a knee-jerk reaction from customers yet

A few days ago when State Bank of India (SBI) announced a one-time settlement (OTS) scheme for tractor and farm equipment loans, it signalled that instalment collections may take some time to recover. While investors in non-banking finance companies (NBFCs) haven’t encountered a similar situation over the past few years, there are concerns whether SBI was setting the stage for more of such leeway. Election promises and demands in states such as Uttar Pradesh and Maharashtra, which favoured farm loan waiver, also increases concerns.  A senior executive of a private bank ...

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Business Standard
177 22