SBI Provides Rs 3000 Crore in Aid To MSMEs

The State Bank of India (SBI) has begun the government’s credit guarantee scheme for micro, small, and medium enterprises (MSME) through disbursal.SBI Provides Rs 3000 Crore in Aid To MSMEs

On Tuesday, the public sector bank dispensed about Rs 3,000 crore altogether to 22,000 units in the MSME sector, Rajnish Kumar, chairman of SBI informed the media.

“A scheme like a guarantee scheme for MSMEs, it has capital implications for the banks. In a way, this Rs 3 trillion means Rs 30,000 crore further capitalization also has happened indirectly for the banks,” Kumar said at the CII annual session.

Kumar said there is a scarcely discernible difference between risk avoidance and risk reasonability, looking to dispel any confusion¬† over the cautionary assessment that risk avoidance was unavoidable in the banking sector. “But I want to ask, is the risk aversion from the lenders or the borrowers?” he said.

In what gave off the impression of being a push to shatter the idea that stopping assets with the Reserve Bank of India suggests banks are chance unwilling, 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 loan 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 an Armageddon situation for banks with rising non-performing resources were exaggerated, however, he conceded that there is indeed a lack of clarity resulting in some vulnerability for the banks over how the next six months will get down to business for the division.

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