Banks should keep a close watch on lending practices of NBFCs: SBI MD
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Significantly, banks lend to NBFCs or MFIs and onward lending is done by them. These institutions use their own disbursement and collection systems to make loans.
Non-Banking Financial Companies (NBFCs) to whom banks lend should keep a close watch on the lending practices of such NBFCs. CS Shetty, Managing Director of State Bank of India (SBI) said this. He said that NBFCs and Microfinance Institutions (MFIs) should follow the same principles of risk assessment and credit monitoring as large banks. Significantly, banks lend to NBFCs or MFIs and onward lending is done by them. These institutions use their own disbursement and collection systems to make loans.
Shetty said, banks lending to non-banking financial companies (NBFCs) should keep a close watch on the way they lend to such NBFCs. NBFCs should follow the same principles of risk assessment and credit monitoring as large banks from whom they borrow. He said that a good portion of bank loans are given to NBFCs and MFIs, so the risk should be properly assessed. Shetty said a banker’s job is to assess, mitigate and price risk. He also said that SBI is not looking at rapidly expanding the network of 65,000 business correspondents, but is focusing on making them more efficient.
Disclaimer:IndiaTheNews has not edited this news. This news has been published from PTI-language feed.
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