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Financial Year 2019: State Bank of India purchased loan worth INR 27,000 crore from non-banking financial companies

SBI has obtained retail loans costing INR 27000 crore that includes INR 10,000 crore of micro-finance loans from the non-banking finance organizations in the financial year 2018-2019.

The largest lender of India, State Bank of India in the month of October in the year 2018 specified that it would be acquiring till INR 45, 000 crore from the finance companies who are going through a flexibility crisis after IL and FS group organizations defaulted on the repayments. It offered the much required capitalizing support to the finance companies.

The managing director of digital as well as retail banking, PK Gupta stated that the bank has authorised INR 27000 crore of loans that should be purchased from the finance companies. Out of this, work for more than INR 19500 crore is already done. Processing for more than INR 6000 crore is in progress.

Such assets that comprises of mortgage loans along with microfinance credit, etc are obtained via the assignment path directly. Unlike securitization in which banks are seen investing in the pass via certificates for any underlying loan, they would be included in the loan book.

State Bank of India earned a chance of expanding the loan book by buying standard portfolio assets at great rates.

Executives of State Bank of India said that the yield on the loan portfolio varies from 8.75 %-10.5 % on the basis of the asset pool’s profile and competition. On the other hand, chairman of SBI, Rajnish Kumar said that the buying of the loan was to expand the loan book but not risking the extending balance sheet via branch network organically.

State Bank of India’s credit to deposit ratio was standing at around 68.67 % at the end of the month of December in the year 2018. Gross Advances at the Whole Bank level has reported growth of 11.99 % from INR 19.24 trillion starting on the month of December in the year 2017 to INR 21.55 trillion ending on the month of December in the year 2018.

The bank deposits expanded 6.76 % starting from INR 26.51 trillion in the month of December in the year 2017 to INR 28.30 trillion in the month of December in the year 2018.