SBI Home Finance Ltd (SBIHF), the arm of State Bank of India, will launch a Rs 25-crore equity issue within the next three months to boost its Tier II capital. Sources said this would be required to maintain the capital adequacy at the present 8 per cent level.
Mihir L Chandra, managing director of SBIHF, said it for 1997-98 would be the retail segment. Out of the companys total credit disbursals, retail clients constitute about 42 per cent. SBIHF is in talks with a number of corporates for a tie-up in granting home loans to their employees. Sources said the scheme would be effective in increasing the retail base of SBIHF and also increase disbursals by quantum leaps.
The scheme will enable corporates opting for it to offer a lower rate of interest on loans to their employees, if they so wish. In this case, the company will pay the difference between the interest rate charged by SBIHF and that paid by its employees.
More From This Section
The emphasis on increasing the retail base stems from the fact that SBIHFs non-performing assets (NPAs) have jumped from 3 per cent to 6 per cent this year mainly due to default by some of its major corporate clients. The rise has prompted the company to set up an exclusive recovery cell in Calcutta to monitor and follow up the NPA accounts.
Chandra said the total amount of loan sanctioned in 1996-97 was Rs 151 crore, while the total deposit amount was Rs 170 crore. The cumulative ratio of loan sanction to loan disbursals have improved from 74 per cent in 1995-96 to 81 per cent in 1996-97.
Chandra said efforts are on to gradually increase this ratio and squeeze the gap between sanction and disbursal of loans.
SBIHF officials said the total monthly collections from the public in the form of fixed deposits have jumped by a whopping 66 per cent from Rs 6 crore around April 1997 to Rs 10 crore from June onwards. Chandra said the reason for this sudden spurt was because of the twin effect of dwindling faith of the public in non-banking finance companies (NBFCs) and the crash of ITC Classic. The officials said most depositors who are rushing to put their money in SBIHF and other housing finance companies are those who earlier reposed faith in ITC Classic.
Sources said SBIHF will be participating in the Golden Jubilee Rural Housing Scheme to be announced on August 15, whereby loans will be granted in rural areas with population between 50,000 and 2 lakh. Refinance will be granted by the National Housing Bank (NHB) for this scheme and the 25 housing finance companies recognised by it will be set targets for loan disbursements in this fiscal. A countrywide target has been set for financing 50,000 units in 1997-98.