SKS Microfinance, which has been sailing in rough weather in Andhra Pradesh ever since the state government promulgated an ordinance to regulate microfinance lenders, today said it has a loan sanction of Rs 2,000 crore from various banks.
"We were disbursed Rs 400 crore after the implementation of the Ordinance in AP in October and the company is upto the mark as far as payments to its creditors are concerned," SKS Chief Financial Officer S Dilliraj said.
"We have not asked for any restructuring of loans from banks. We are current on all our repayments. We have a strong sanction of Rs 2,000 crore in the pipeline. We have been disbursed an incremental loan of Rs 400 crore ever since the ordinance was implemented by the state government," he told media-persons here.
Welcoming the Malegam committee recommendations, he said putting a cap on interest rate of the MFIs needs to be looked into in a holistic manner.
"Philosophically, one may oppose the cap on interest rate or regulatory interest regime. But we need to take things in balance and in holistic manner.
"Now what you need to do is to go back and reinvent your operational models and bring in lot of financial efficiency, reduce operating costs to maintain the ROI," the CFO said.
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While adding that the loan recovery rate in Andhra Pradesh is still lower than the normal, he said the state government, which enacted the ordinance on microfinance in the last winter session of the Assembly, should withdraw the Act as per the Malegam committee recommendations.
"As a responsible citizen, the state government should withdraw. That's our prayer," he said.
"The Malegam committee's specific request to withdraw the Andhra Pradesh Microfinance Institutions Act on seven merit-based arguments provides much-needed relief to the industry.
It clarifies that the RBI regulates MFIs that are non-banking financial companies (NBFCs) and that there is no "regulatory void" for the State government to fill," Dilliraj added.
He said SKS Microfinance will withdraw the petition filed in the state high court challenging the Ordinance passed by the Andhra Pradesh government once the Act is repealed.