No concern on liquidity of NBFCs: SBI chairman Rajnish Kumar1 min read . Updated: 23 Sep 2018, 05:15 PM IST
Rajnish Kumar said SBI lends support to NBFCs in private and public sector within the regulatory policy framework and will continue to do so
New Delhi: Assuring lending support to non-banking financial companies, SBI Chairman Rajnish Kumar on Sunday said there was no concern on liquidity of such firms, amid ongoing debt crisis in IL&FS Group.
Shares of housing finance companies came under sudden heavy selling pressure on Friday as investors raised concerns over rising cost of borrowing for the companies amid crisis at IL&FS.
Experts attributed the fall in NBFCs’ scrips to tightness in money market and a lack of clarity on IL&FS exposure.
“Some comments are being attributed to SBI about the Bank being wary of lending to NBFCs. The rumours are baseless. SBI lends support to NBFCs in private and public sector within the regulatory policy framework and will continue to do so," Kumar said in a statement.
In fact, the recent regulatory guidelines on the co-lending model opens up further opportunities for collaboration between SBI and non-deposit taking NBFCs to increase lending to priority sectors, he added.
“There is no concern on liquidity of NBFCs in view of their liquid cash position and availability of committed lines," said the top official of the country’s largest lender.
Earlier this month, it came to light that IL&FS group defaulted on a short-term loan of ₹ 1,000 crore from Sidbi, while a subsidiary has also defaulted ₹ 500 crore dues to the development finance institution.
While IL&FS has nearly ₹ 35,000 crore consolidated debt, IL&FS Financial Services has ₹ 17,000 crore of debt, which sits as standard asset for most of the lenders, according to a Nomura India report.
The group has seen its various long-term and short-term borrowing programmes downgraded to ‘default’ or ‘junk’ grades by credit rating agencies, even as the regulators are also probing alleged delay in disclosure about certain loan defaults. Among others, capital markets regulator Sebi, the Reserve Bank, the Corporate Affairs Ministry and the Finance Ministry have received complaints about alleged wrongdoings at Infrastructure Leasing & Financial Services Ltd (IL&FS) and its various group entities, including the listed ones.
(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed)