His comments come in the backdrop of the friction between the Centre and RBI over the liquidity issue.
The largest public sector bank on November 15th assured the financial sector of no liquidity crisis in the Non-Banking Financial Companies (NBFCs) sector.
Rajnish Kumar, chairman, State Bank of India told reporters on November 15 that the sector was not facing any liquidity crisis.
"There is no liquidity crisis in the NBFC sector... Rollovers have been successful and all of them have been able to meet their commitments as far as their obligations are concerned," the chairman said.
His comments come in the backdrop of the friction between the government and the Reserve Bank of India (RBI) over the liquidity issue.
While the government has been persistent on its stand that the financial sector was reeling under severe stress after IL&FS, one of the largest NBFCs, defaulted on its payment obligation, the central bank has maintained that the sector was not facing any crisis.
The central bank is said to have assured the government of "stepping in as and when required" to address the liquidity situation even as it has asked for data from the government on the basis of which the latter claims it a crisis, sources have told Moneycontrol.
During the 19th Financial Stability and Development Council's (FSDC) meeting, held earlier this month, the RBI indicated the government that if liquidity was acceptable till September, what makes it believe that the situation has worsened?
"Share the data with us (regarding crunch in NBFCs)... The liquidity situation is not as bad as it is being projected to be," the RBI told the government.
The central bank has called for its board meeting on November 19th to solve issues with the government.
The agenda is to provide relief on liquidity-related issues for NBFCs and devise simpler lending norms for MSMEs, a top government official has said.
"Some resolution on liquidity and credit-related issues is expected in the meeting," the official said.
Recently, SBI had agreed to buy loan assets worth Rs 20,000 - Rs 30,000 crore from NBFCs. The bank had initially planned for a growth of Rs 15,000 crore through portfolio purchase during the current year which is now being enhanced," SBI said in a statement.
Portfolio purchase from NBFCs is, generally, a route for banks to meet its regulatory requirement for priority sector lending. NBFCs, on the other hand, find easy buyers for such sell-offs when they are looking at selling their assets after holding them for a long time.
