The refrain in the recent past has been that public sector banks (PSBs) are averse to lending to the capital markets.
But here's some empirical evidence to the contrary: Three public sector bigwigs -- the State Bank of India (SBI), Bank of India (BoI) and Bank of Baroda -- increased their capital market exposure by more than four times in 2000-01.
In absolute terms, the exposure is still low. Collectively, it went up from Rs 215.22 crore in 1999-2000 to Rs 911.63 crore in 2000-2001.
According to Reserve Bank of India (RBI) data, SBI's advances to the capital market went up nearly three times to Rs 106.50 crore in 2000-01 from 36.61 crore in the fiscal before. In the case of BoI, the increase was more than four-fold to Rs 595.84 crore from Rs 145.19 crore.
BoB's loans against share rose more than six times during 2000-01 to Rs 209.29 crore from Rs 33.42 crore earlier.
For Indian Bank, the increase in advances to the capital market was more than 300 times during the financial year -- from Rs 21 lakh to Rs 72.07 crore.
Among the private sector banks, lending by ICICI Bank to the capital market increased 4.24 times to Rs 204.22 crore from Rs 48.16 crore.
The advances by UTI Bank went up nearly five times to Rs 321.02 crore from Rs 64.82 crore. The outstanding advances by two other prominent private sector banks -- HDFC Bank and IDBI Bank -- however, fell from Rs 673.94 crore to Rs 174.80 crore and from Rs 66.01 crore to Rs 51.08 crore, respectively.
Exposure of the Development Credit Bank shot up by nearly seven times to Rs 195.69 crore as on March 31, 2001, from Rs 28.50 crore as on March 30, 2000. The lending by the Global Trust Bank remained little changed -- Rs 515 crore as on March 31, 2000, to Rs 517 crore as on March 31, 2001.
Among foreign banks, Bank of Bahrain and Kuwait's exposure shot up from Rs 4 lakh to Rs 27.29 crore and that of Bank of Nova Scotia from nil to Rs 3.75 crore. Standard Chartered Bank's exposure more than halved to Rs 304.84 crore as on March 31, 2001 from Rs 805.84 crore a year back. The lending to the capital market by the Standard Chartered Grindlays was almost one-third to Rs 3.41 crore at the end of the financial year 2000-01 from Rs 9.94 crore at the end of the previous fiscal year.
The exposure has also decreased for Citi Bank (from Rs 208.56 crore to Rs 167.40 crore) Dresdner Bank (from Rs 35.77 crore to nil), Hong Kong and Shanghai Bank (from Rs 241.03 crore to Rs 169.27 crore) and Bank of Tokyo (from Rs 8.01 crore to nil) as well.
In aggregate, the exposure of 12 public sector banks increased during the financial year, while for 15 other public sector banks it declined.
The public sector banks for which the decline in exposure to the capital market during the year was significant are -- Allahabad Bank (from Rs 19.50 crore to Rs 89 Lakh), Corporation Bank (from Rs 23.04 crore to Rs 8.19 crore), Dena Bank (from Rs 70.98 crore to Rs 18.51 crore), Indian Overseas Bank (from Rs 2.68 crore to Rs 1.24 crore), State Bank of Saurashtra (Rs 11.51 crore to Rs 1.97 crore) and State Bank of Travancore (from Rs 18.15 crore to Rs 70 lakh).
