A recent press release said that in order to maintain the credit growth in the scenario of economic slowdown the Jaipur – based State Bank of Bikaner and Jaipur has decided to cut short the lending to corporate and increase the retail loans.
According to Mr. Shiva Kumar, Managing Director of SBBJ, the bank currently has a share of around 55 per cent in commercial loans (large companies) and now it would reduce the share to 45 per cent by the end of March 2013.
With the economic growth becoming modest there has been a considerable drop in corporate loans demand. SBBJ, an associate bank of State Bank of India has expected a growth of 18 per cent in credit for the current financial year.
Mr. Kumar also said that the demand from rural and semi – urban areas have been increasing vigorously and it would become an aggressive sector. The banks would rely on home loans and car loans for retail loans. It would not completely avoid lending corporate loans but it would focus more on retail loans.
The bank has reported a drop in its net profit for the second quarter ended September of the current financial year to 13.68 per cent as the provision for non – performing assets increased. The bank’s net interest income improved by 12 7 per cent and net interest margin increased to 3.37 per cent.