Emergency loan program: HDFC bank beats SBI in Covid program loans | India Business News
Of the total loans of Rs 1.4 lakh crore granted by the banks until January 25, 2021, HDFC Bank has disbursed Rs 23,504. This represents nearly 17% of the loans sanctioned. SBI, with disbursements of Rs 18,700, has a market share of 13.3%. According to banking analysts, this demonstrates HDFC Bank’s ability to lend to small businesses.
ECGLS came in two phases. The first ECLGS-1 was reserved for small businesses and, in the second ECLGS-2 cycle, it was extended to large industries within the 26 sectors in difficulty. HDFC Bank’s performance has enabled private sector banks to outperform public sector banks (PSBs) in financing the micro, small and medium-sized enterprises (MSMEs) sector.
In response to a question to Lok Sabha, Minister of State for Finance Anurag Thakur said the total amount of loans sanctioned and disbursed by the banking sector was just under 2 lakh crore and Rs 1.4 crore, respectively. Of this amount, sanctions and disbursements by public sector banks were Rs 83,162 crore and Rs 61,226 crore. In the case of private banks, the number of sanctions and disbursements was Rs 1.15 lakh crore and Rs 80,227 crore.
In the public sector, after the State Bank of India (SBI), the largest disbursements are National Bank of Punjab (GNP). In the private sector, ICICI Bank with Rs 12,982 crore is the second largest lender, followed by Axis Bank with Rs 8,099 crore.
PSBs have traditionally been the main lenders in the MSME sector. But the typical trend in recent years is that private banks and non-bank financial corporations (NBFCs) have strongly competed with PSBs to gain a larger share of the MSME sector.
However, this trend changed after the national lockdown. As of June 20, NBFCs held a 9.7% share of loans to MSMEs – up from 13% in March, followed by private banks with 38.7% loan share and PSBs with 51.6% loan share. market, according to TransUnion Cibil. State-run lenders still represent over 60% of the country’s banking activity.
The SBI, during a call to investors on February 4, said the bank had sanctioned Rs 26,000 crore (cumulative) under the ECLGS. Of this amount, 23,000 crore rupees were cumulatively disbursed. The bank also said that only Rs 488 crore was disbursed under ECLGS-2 and the remainder in ECLGS-1.
In the appeal, the bank’s president, Dinesh Khara, said that although the restructuring window for medium and small businesses is available until March 31, the additions would not be substantial. He said ECLGS disbursements were lower in the last quarter because the bank had resumed SME growth in segments other than the ECLGS program.