Moderation likely in unsecured lending: SBI chief

Mumbai: SBI Chairman Dinesh Kumar Khara on Wednesday said there will be moderation in the bank’s unsecured lending portfolio following the Reserve Bank of India’s tightening of norms. He said the impact of higher risk weights will have a 0.02-0.03 per cent impact on its net interest margins in the December quarter, but a better picture will emerge in the next quarter.

“Whatever we were doing, we will continue to do, but there will be a moderation,” Khara told reporters on the sidelines of a FIBAC event here, when asked about the RBI’s tightening of norms. After asking lenders to be cautious, the RBI increased risk weights on unsecured lending for banks as well as non-banks earlier this month.

The RBI has asked lenders to allocate more funds against each risky loan that will result in higher buffers in case of any stress. The move also means personal loans and credit card borrowings will become dearer.