Never miss a story

Get subscribed to our newsletter


×
Mikel Parera / Unsplash

SFBs witnessed decline in collections as well as quality metrics of the assets.

Assets under management for small finance banks are estimated to rise by 20 per cent in FY22, as against 18 per cent increase in the last fiscal, rating agency ICRA said.

Small Finance Banks' main objective is to take basic banking activities to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries, among others. Like other commercial banks, these banks can also lend and take deposits.


As per the rating agency's report, even as the growth in portfolio is expected to drive an improvement in revenue, the expected elevated credit costs are likely to keep the profitability subdued in FY22. Besides, ICRA maintained its cautious stance, as the recent surge in Covid-19 infections could play a spoilsport and impact the recovery in growth. Amid the second wave of the pandemic, SFBs witnessed decline in collections as well as quality metrics of the assets.

Also Read : The choirboy bandit robbed banks on a bicycle

"Credit costs are expected to remain elevated in FY22 as well, which would keep the profitability subdued. Over the long term, SFBs' ability to improve the operating efficiency further and control the credit costs would be imperative for improving the return," said Sachin Sachdeva, Vice President and Sector Head, Financial Sector Ratings at ICRA.

Further, the overall risk profile of SFBs' portfolio remains high given the higher proportion of unsecured loans despite their foray into retail asset classes such as vehicle loans, business loans, loan against property and housing finance over the last few years. (IANS /SP)


(Keywords : finance, banks, asset, management, fiscal, growth, revenue, credit, profitability, pandemic, portfolio, loans, retail, business, property, housing, vehicle, banking, business, industry, commercial.)


Popular

IANS

As the economy continues to recover from the prolonged pandemic.

By Rohit Vaid
The Centre might bestow infrastructure as well as industry status to new sectors to boost several pandemic hit industries in the upcoming Union Budget. Industry insiders said that several sectors and sub-industries such as hospitality, automobile retail, specific diganotics facilities and companies engaged in installation of EV charging stations amongst others might get the status.
The infra tag will enable these sectors to avail tax breaks, incentives and credit on lower interest rates. "Sectors which are in greenfield or which would need capex augmentation to help them overcome the pandemic can be looked from the lens of an infrastructure sector," said Jagannarayan Padmanabhan, Director and Practice Leader, Transport & Logistics, Crisil Infrastructure Advisory. "Also many of the already identified sectors need a sustained policy push which will help them get visibility both in terms of quantum and the time period of applicability."

Till now, activities associated with laying of power and telecom transmission and distribution lines, roads, highways, railways and construction of facilities such as hospitals, affordable housing, power generation units, water treatment plants, SEZs and certain type of hotels amongst others were given such status.

Besides, these sectors are a part of harmonised master list for infrastructure sub-sectors. However, in April 2021, exhibition-cum-convention centre was included in the list. "Given the focus around electric vehicle, and need for significant investment in charging stations, if the government adds the sector in infrastructure list, the benefits arising out of it will be significant," said Vishal Kotecha, Director, India Ratings and Research. "Infra tag on sectors increases ability to raise funds, access to dedicated funds and lenders, foreign capital, lower interest rates among others."

Electric car Given the focus on electric vehicles, the advantages of including the industry in the infrastructure list will be enormous. Free SVG

Keep Reading Show less
Wikipedia

A team is working to produce safest medicine for covid treatment.

A team led by chief scientist Ravi Shankar, is working on two combinations to provide the safest medication to coronavirus patients. "Experts say that a combination of antivirals with different mechanisms can be more effective to counter the viral pandemic. We are working on two combinations - Umifenovir with Molnupiravir (an antiviral) and Umifenovir with Niclosamide (anti-parasitic)," he said.

Also read: Antiviral Remdesivir Receives FDA

Molnupiravur drug has received only Emergency Use Authorisation in India and abroad. Though its usage showed reduced hospitalisation during clinical trials, its biggest drawback are the side-effects, he added.

"Now, we are trying to keep a low dosage of Molnupiravir in its combination with Umifenovir which may weed out the side-effects such as the risk of cartilage and muscle damage. If successful, it will make Umifenovir more effective in Covid-19 treatment," said the chief scientist. The other combination is Umifenovir with Niclosamide.

Keep Reading Show less
Wikipedia

MEA Jaishankar instructed Indian envoys to Canada and the US, "to urgently respond to the situation."

External Affairs Minister S. Jaishankar on Friday instructed Indian envoys to Canada and the US, Ajay Bisaria and Taranjit Singh Sandhu, "to urgently respond to the situation" where four Indian nationals including an infant have lost their lives on the US-Canada border. The minister said this in a public tweet. Neither of the two missions have responded on the microblogging site till the time of filing of this report.

In a statement Thursday without identifying the victims, the Royal Canadian Mounted Police (RCMP) stated that "on the morning of January 19, 2022, RCMP officers with the Integrated Border Enforcement Team received concerning information from their counterparts in the United States".

Royal Canadian Mounted Police (RCMP) RCMP officers received concerning information from their counterparts in the United States.Wikipedia

Keep reading... Show less