
-
ALSO READ
NBFC stocks crash after RBI mulls stricter norms; DHFL slips 18.5%
RBI assails NBFCs for sole reliance on short-term funds, terms it myopic
Rapid growth of the shadow banking sector may endanger India's growth story
NBFCs slip as RBI plans to strengthen norms; Edelweiss Financial cracks 13%
Private banks, NBFCs eat into state-run lenders' pie of MSME loans
-
Top lender State Bank of India (SBI) said on Tuesday it is stepping up its target to buy "good quality" asset portfolios from non-banking financial companies (NBFC).
India's NBFC sector has been in the spotlight after IL&FS, a major infrastructure financing and construction company, defaulted on a string of debt obligations in recent weeks triggering wider concerns about risks in the country's financial sector.
SBI said it believes that there is a "good opportunity" to expand its loan portfolio at "attractive rates".
"SBI today stepped up substantially a facility for purchasing a portfolio of assets from NBFCs to provide liquidity to NBFCs. This measure should alleviate liquidity concerns to a great extent," Economic Affairs Secretary Subhash Chandra Garg said.
The lender said it now sees scope to buy additional portfolio assets of Rs 200 billion to Rs 300 billion this year. The bank had initially planned for growth of Rs150 billion through portfolio purchases.
"This is going to be really beneficial for the NBFCs as they will get the liquidity they require, while SBI will get assets with high yields," said an analyst with a domestic brokerage who did not wish to be named.