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 story : Banks to lend Rs 1.85 lakh cr in next 6 months to specified sectors including MSMEs #FinanceIndia #StockMarketNEWS Banks to lend Rs 1.85 lakh cr in next 6 months to specified sectors including MSMEs

@StockMarketNEWS Thu 12 Mar, 2020

Posted in: #FinanceIndia #StockMarketNEWS

Banks to lend Rs 1.85 lakh cr in next 6 months to specified sectors including MSMEs #FinanceIndia #StockMarketNEWS
Banks to lend Rs 1.85 lakh cr in next 6 months to specified sectors including MSMEs New Delhi, Mar 5 (KNN) In the next six months, banks will lend Rs 1.85 lakh crore to specified sectors including micro, small and medium enterprises (MSMEs), said an expert.

This can save around Rs 7,400 crore if credit growth happens at 9 per cent for housing and 5 per cent for vehicle and MSME loans, Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India has said.

"As per our estimation the banking industry in the next 6 months (till July 31,2020) will be lending Rs 1.85 lakh crore in specified sectors and can save around Rs 7,400 crore (assuming credit growth of 9 per cent for housing and 5 per cent for vehicle and MSME loans) as CRR benefits," the SBI said in a paper.

Capital charge on Rs 1.85 lakh crore would be around Rs 15,000 crore. This Rs 7,400 crore will have an impact on banks' profitability and cost of deposits. "We believe that banks' profitability will increase by Rs 480 crore (at 6.5 per cent G-sec yield) Cost of deposits may also be impacted by 2-3 bps.

This is an excellent step and RBI if it extends this to December 31, 2020, as the second half is more productive in lending due to the festive season could have a larger impact on the banking sector," it said.

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