MUMBAI: In a move that will ease liquidity crunch among non-banking financial companies, State Bank of India (SBI) plans to increase its planned purchase of portfolio assets from these firms from Rs 15,000 crore announced earlier to Rs 45,000 crore.
NBFCs sell a part of their loan portfolios from time to time and banks buy these to meet their priority-sector lending norms.
SBI said it was open to buying additional portfolios in both priority and non-priority sectors of NBFCs, triggering speculation that this was aimed at bailing out the stressed sector.For one, SBI’s move comes at a time when the country’s shadow banks are staring at a liquidity crunch following defaults by IL&FS, rise in borrowing costs, and trouble in refinancing market borrowings.
“This measure should alleviate liquidity concerns to a great extent,” said Secretary, Department of Economic Affairs, Subhash Chandra Garg.The decision also comes a day after the National Housing Bank decided to take additional refinance risk from HFCs.