SBI gives Rs 3,000 crore to MSMEs in a day

NEW DELHI: The government's credit guarantee scheme for micro, small and medium enterprises (MSME) has taken off with the State Bank of India (SBI) beginning disbursements.Rajnish Kumar, chairman of SBI, the country's largest lender, on Tuesday said the public sector bank in a single day disbursed about Rs 3,000 crore in total to 22,000 units in the MSME sector."A scheme like the guarantee scheme for SMEs, it has capital implications for the banks. In a way, this Rs 3 trillion means Rs 30,000 crore further capitalisation also has happened indirectly for the banks," Kumar said at the CII annual session.Kumar said there is a fine line between risk aversion and risk prudence, seeking to clear the air on the opinion that risk aversion was pervasive in the banking system. "But I want to ask, is the risk aversion from the lenders or the borrowers?" he said.In what appeared to be an effort to dispel the notion that parking funds with the Reserve Bank of India implies banks are risk averse, he said, "If I get Rs 2 lakh crore in deposits in two months, even if I'm a very efficient bank, I cannot disburse so much within two months."Addressing the issue of fund-starved non-banking finance companies (NBFCs), Kumar said, "We are definitely supporting all the NBFCs with whom the bank (SBI) has a satisfactory record of dealing."Kumar said that reports painting a doomsday scenario for banks with rising non-performing assets is overstated, but added that there is uncertainty over how the next six months will shape up for the sector.

from Economic Times https://ift.tt/36SuX1h