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No plan to pass interest rate hike to MFI customers: Suryoday SFB's Babu

R Baskar Babu, managing director & chief executive officer of Suryoday Small Finance Bank, tells Manojit Saha in an interview that the regulator wants these lenders to rebalance the portfolio

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Suryoday Small Finance Bank | Reserve Bank of India | small finance banking

Manojit Saha 



R Baskar Babu, Managing Director & CEO, Suryoday Small Finance Bank
R Baskar Babu, Managing Director & CEO, Suryoday Small Finance Bank

The Reserve Bank of India (RBI) recently flagged high growth of (SFBs) that could impact their asset quality. R Baskar Babu, managing director & chief executive officer of Suryoday Small Finance Bank, tells Manojit Saha in an interview that the regulator wants these lenders to rebalance the portfolio to moderate growth risks. Edited excerpts:

The in its June Financial Stability Report observed that the high balance sheet growth of SFBs from a low base raised some concerns on asset quality. Do you think SFBs are going at a bit of a fast pace and sometimes compromising on the underwriting standards?

I do not think so. Being a bank for the past five years is quite a bit of learning for us. All the growth we do is also balanced with adequate or more than adequate risk-control measures. To that extent, the regulator wants us to rebalance the portfolio, moderating the growth risks, etc. so that it does not cross the line where the growth creates more risks than is known to the . However, we have seen a once-in-a-lifetime impact due to Covid in the past two and a half years. The impact has been larger on low-income households. The good news is this segment is recovering a little faster than the economy is. We are seeing improvement in all parameters, including collection efficiencies and reduction in gross non-performing assets (NPAs).

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First Published: Fri, July 22 2022. 15:03 IST

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