Sbi Home Told To Redo Profit Numbers

Financial institutions and State Bank of India (SBI) have directed SBI Home Finance to rework its profitability figures and revise business projections for the current year and the next four years as a precondition to fresh fund infusion to revive the housing finance company.

This was decided at a meeting of Unit Trust of India (UTI), Housing Development Finance Corporation (HDFC), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and SBI today called by the National Housing Bank (NHB) to take a decision on the beleaguered SBI Home Finance.

P P Vora, National Housing Bank chairman, said that a final decision will be taken in the second or third week of July. The present projections are too conservative considering the past six months' performance, he said.

"SBI Home has sanctioned Rs 18 crore and disbursed Rs 16 crore in terms of housing loans on a monthly basis. This in effect means that the housing finance outfit will achieve Rs 200 crore in disbursements during the current year, even as SBI Home had projected a disbursement target of Rs 200 crore in the coming year," said Vora.

The meeting deliberated at length on the rehabilitation scheme of SBI Home, noting that the actual performance so far has been far better than that projected in terms of sanctions and disbursements, said Vora.

The four financial institutions met with the housing finance sector regulator NHB in Mumbai to take a view on how to go about rehabilitating SBI Home, which has run its huge losses on account of non-performing assets.

For the year ended March 31, 2001, SBI Home's net loss stood at Rs 21.7 crore compared with a net loss of Rs 24.53 crore in the previous fiscal. The accumulated losses of Rs 60.65 crore in March 2000 wiped out the Rs 17.76 crore net worth of the outfit. SBI Home requires funding of around Rs 100 crore to recapitalise its operations, following losses in the past couple of years.

SBI Home has been surviving through a line of credit from its parent body, SBI, which sanctioned Rs 200 crore in January this year and Rs 210 crore in March last year.