Expect margin to remain stable at current levels: REC
REC’s net interest margins (NIM) fell sequentially and despite a sharp decline in disbursals, the company managed to register growth in assets under management.
On NIMs, Sanjay Malhotra, Chairman and Managing Director of the company said, “Sequentially it has decreased that is because of the extra-ordinary item, one asset R.K.M Powergen was resolved because of which we recognised interest income in Q2 and because of that margins have fallen.”
He further said, “On a nine monthly basis, the net interest margin has improved by about 20 basis points. Last 2-3 years it has been in the range of 3.5-4 percent. In terms of guidance, I expect it to remain over there because the borrowing costs are decreasing.”
On disbursals, Malhotra said, “Sequentially, the disbursements have fallen because last to last quarter was extraordinarily good quarter because of the liquidity infusion which was required because of COVID loans. So about Rs 25,000 crore of loans have been disbursed so because of that now there has been a dip in those disbursals.”
On the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGY) scheme, he said, “The focus is now shifting on improving the sustainability of the discoms which are the key for growth in the power sector.
