State Bank of India said on Tuesday it is stepping up its target to buy "good quality" asset portfolios from non-banking financial companies (NBFC).
The NBFC sector has been in the spotlight after IL&FS, a major infrastructure financing and construction company, defaulted on a string of debt obligations in recent weeks triggering wider concerns about risks in the country's financial sector.
SBI said it believes that there is a "good opportunity" to expand its loan portfolio at "attractive rates".
The lender said it now sees scope to buy additional portfolio assets of Rs 20,000 crore to Rs 30,000 crore ($2.69 billion to $4.04 billion) this year. The bank had initially planned for growth of Rs 15,000 crore through portfolio purchases.
"This is going to be really beneficial for the NBFCs as they will get liquidity they require, while SBI will get assets with high yields," said an analyst with a domestic brokerage who did not wish to be named.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
