Page 7 - Banking Finance May 2024

BANK UPDATE

equity shares in its joint venture sub- come eligible for declaration of divi- pany Ltd. (NCGTC) against the eligible
sidiary Canara Robeco Asset Manage- dends. micro units under PMMY.
ment Company by listing the business
The central bank has proposed that
on the stock exchange. The public sec- the new guidelines should come into NBFC co-lending AUM
tor bank has 51 per cent stake in the effect from FY25 onwards.
mutual fund. nearing Rs. 1 lakh crore
Mudra loans topped Rs. 5- Five years after the launch, the co-lend-
Public sector banks divi- ing book of non-banking finance com-
lakh-crore mark in FY24 panies (NBFCS) is expected to reach Rs
dend payout may exceed Small business loans under the Pradhan 1 lakh crore by June 2024 in the wake
Rs. 15,000 crores Mantri Mudra Yojana (PMMY) wit- of interest from partner banks and the
nessed record growth in disbursals in benefit of access to funding and diver-
Public sector banks are likely to pay a
dividend in excess of Rs 15,000 crore FY24 and also crossed the milestone of sification, according to CRISIL Ratings.
Rs. 5 lakh crores, according to the lat-
for the financial year ending March Over the medium term, growth mo-
est Government data.
2024 on the back of improved profit- mentum is seen healthy at 35-40 per-
ability, according to sources. Loans sanctioned in the last financial cent annually, a midst rising interests
year were higher at Rs. 5.28 lakh of partners-NBFCS as well as banks, it
In the first three quarters of the cur-
crore. The total disbursals stood at Rs. said. The partners, however, may in-
rent financial year, all 12 PSBs earned
5.20 lakh crore in the year ended crease their focus on other asset
a total profit of Rs 98,000 crore, only
Rs 7,000 crore less than the entire March 2024, against Rs. 4.40 lakh classes such as loans to micro, small
crore in the previous financial year. and medium enterprises (MSME) and
FY23.
Nearly 70 per cent of the beneficiaries home loans given higher risk weights
PSBs earned the highest-ever aggre-
of these loans are women. for personal loans.
gate net profit of Rs 1.05 lakh crore
during FY23 compared to Rs 66,539.98 "With this, approximately Rs. 46 lakh Crisil said a study of 100 NBFCS, ac-
crore has been disbursed in Mudra counting for over 90 per cent of the
crore earned in 2021-22.
loans since the introduction of the sector's AUM, indicates these trends.
As a result, the government earned a
scheme in 2015, if we include the pro- Interestingly, only about a third of these
dividend of Rs 13,804 crore, 58 per visional figures for FY24,''a senior have active co-lending books at present.
cent higher than the Rs 8,718 crore
Mudra official told. Ajit Velonie, Senior Director, CRISIL
paid out in the previous financial year.
The growth is driven by a variety of Ratings, said, "Co-lending is seen as a
Since the profit in the current financial
factors. "Lower delinquency rate in this win-win-for NBFCs-and banks alike, as
year would be much higher than the segment is motivating public sector it allows sharing of risk and rewards.
previous year, so will be the dividend
banks (PSBs) to further boost loan For NBFCS, particularly for mid-sized
payout to the government, sources
growth. PSBs are diligently monitoring and smaller ones, it enables access to
said. Going by the past record, the divi- fund utilisation through consistent fol- bank funding as well as diversification
dend payout for FY24 should be in ex-
low-ups and frequent customer inter- in funding avenues."
cess of Rs 15,000 crore, they added.
actions," Bibekananda Panda, Senior "This becomes even more relevant in
Earlier in January, the Reserve Bank, in Economist, State Bank of India (SBI), light of the recent increase in risk
its draft guidelines, proposed to allow told. weights for bank lending to NBFCS. The
banks having net non-performing as- According to a senior Mudra official, model also allows NBFCs to grow in a
sets (NPAs) ratio of less than 6 per cent
there is also an institutional framework capital-efficient manner. For banks, on
to declare dividends.
that encourages lenders to push dis- the other hand, it provides optimal
As per the prevailing norms last up- bursal of Mudra loans further, such as access to niche customers and geogra-
dated in 2005, banks need to have an the guarantee provided by the Na- phies and also aids them in meeting
NPA ratio of up to 7 per cent to be- tional Credit Guarantee Trustee Com- their priority sector lending targets,"

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