Page 28 - Banking Finance July 2021

ARTICLE

as well as timely advance. The share of 21 public sector banks (before MSME lending, for the first time in
amalgamation) had fallen to 50.7 percent as of June 2018 from 55.8 percent in the past few years. As of Dec'19,
June 2017 and 59.4 percent in June 2016 as per quarterly report submitted by PSB market share stood at 49.8%
CIBIL and SIDBI. During that period MSME sector registered a growth of 16.1%. in overall MSME lending book,
If we can compare the PSBs with peer private bankers, we can find a very with highest market share in Micro
contrasting feature. segment at 59.2%.
¢ Lenders disbursed 92,262 crores
Until December 2018, When the PSBs registered a growth of 5.5percent and
worth of fresh credit towards the
the peers registered a mammoth growth rate of 23.4%.Major factor towards
Micro segment. While private
the drop of market share of PSBs is the gain in momentum by private peers as
banks and public sector banks
well as NBFCs apart from various other reasons, which comprises of institutional,
have roughly similar share on fresh
systemic as well as policy level. During the above period, the private peers
credit disbursed in the Micro
registered a market share of 29.9 percent as well as NBFCs registered 11.3
segment, the growth trends differ
percent market share.
significantly when analyzed at a
granular sub-segment level.
Going forward if we analyze top public sector lenders for the trend of growth
then the result may seen skewed towards private lenders and NBFCs. The below Y The total on-balance sheet
mentioned table will depict the performance of the top six public sector lenders commercial lending exposure in
and to have a better understanding we can compare with top three private India stands at 64.45 lakh crores as
lenders. of Jan '20, which was 64.04 lakh
crores in Dec '19. Of this, MSME
Name of PSB Total MSME % of Growth Growth In Segment is at 17.75 lakh crores
Advance Advance MSME In MSME Advance credit exposure as of Jan'20.
In Cr In Cr Adv From From Important to note that MSME
Last Year Last Year segment has observed lowering of
State Bank of India 2325290 267614 11.5 14.71 6.37 credit exposure across most sub-
Punjab National Bank 495000 65171 13.16 -18.21 1.02 segments of MSME lending in the

Bank of Baroda 690121 87328 12.65 57.47 47.2 last few quarters. Large corporate
segment is at 46.7 lakh crores
Union Bank of India 346921 70381 20.28 8.01 6.61
credit exposure and has observed
Canara Bank 451223 78773 17.37 -7.51 1.57
a YoY expansion of 6.3%.
Indian Bank 205890 37208 18.07 12.59 9.57
Y The prominent factor for reduction
Name of the
in credit exposure towards MSME
Private Bank
is reduced utilization in working
HDFC Bank 993703 159108 16.01 23.36 22.01 capital limits attributed by COVID-
ICICI Bank 676290 70878 10.48 13.64 10.92 19 related stress. If we analyze at
Axis Bank 571424 61921 10.83 -6 15 granular level the drop in
utilization is much higher in private
Source: Website of various banks, RBI data bank banks than the public sector
lenders. The reason being the
Ray of hope: penetration of public sector
Y Public sector banks (PSBs) had been losing market share continuously over a lenders to micro segment of MSME
long period of time. Surge in both NBFCs and private banks market share as well as granular advance
had been the reason for PSB segment losing its share. However, in the structure instead of focusing on
quarter ending Dec '19, public sector banks have gained market share in mostly corporate.

28 | 2021 | JULY | BANKING FINANCE