SBI group to step up infrastructure lending

Banking behemoth State Bank of India together with associate banks has targeted infrastructure lending of over Rs 1 lakh crore this financial year.Speaking to reporters here today, the SBI Chairman, Mr O.P. Bhatt, said, “We are stepping up infrastructure lending this year along with our associate banks.” Last fiscal, SBI and associate banks advanced Rs 80,000 crore for infrastructure projects such as power plants and petroleum refineries.The big ticket credits have made SBI and group one of the largest project financiers in the country, Mr Bhatt said.“We will continue to focus in this direction.”.The bank is evaluating about five proposals for funding through its venture capital division, he said. SBI’s nfrastructure fund has a corpus of over $1 billion.Mr Bhatt was in Bangalore to chair the annual general meeting of its associate bank State Bank of Mysore. He said SBI was awaiting government decision on merging its associate banks, including SBM, on the lines of the erstwhile State Bank of Saurashtra. Mr Bhatt said, “It (the merger) is desirable, but a decision has to be taken by the Government.”Referring to SBI providing guarantee to corporates, Mr Bhatt said, “Haven’t we become a global sized bank to provide such support?” He made it clear that SBI was prepared to offer more such guarantees.However, SBI in the past has provided guarantees or standby support only on a back-to-back basis. This implied that guarantees would be fully secured.Asked about further reduction in interest rates, Mr Bhatt said the bank was already lending at below the benchmark prime lending rate. “The BPLR is only a rate meant for fulfilling legal requirements. About 70 per cent of our lending is already below this rate.” He also said lending was not skewed in favour of large corporates.“We have conveyed to our micro, small and medium-scale enterprise customers that the current 8 per cent fixed rate will remain for at least 2 years.” He added that lending rates could not be isolated from cost of funds.He said credit offtake was beginning to improve. “The worst is behind us.” Besides, during the first quarter of any financial year, credit offtake remains low. Yet, he said, SBI and group banks have witnessed some buoyancy in the home loan offtake. He also dismissed fears of inflation in view of the high liquidity in the banking system. “If the liquidity is used for building productive assets, there is no cause for fear.”