SBI to buy loan portfolios

Chennai: State Bank of India's (SBI) management intends to seek its board's permission to buy securitised paper and loan assets from other financiers, according to SBI managing director P N Venkatachalam.

Venkatachalam says SBI will, however, restrict itself to securities that enjoyed the highest rating. "Buying loans is another means to increase retail business. Retail portfolio such as housing, vehicle and personal loans is growing fast across the financial sector. In the case of SBI, retail loans portfolio is set to increase by nearly Rs 12,000 crore this fiscal."

Retail loans are increasing by about Rs 800 crore to Rs 1,000 crore per month, he says. "Half of SBI's retail portfolio is housing loans. A major portion of the other half is loans for automobile purchases. Here again, a tie-up with Maruti has helped. SBI lends for over 5,000 cars of Maruti alone, every month."