A short note on excess provisions | Advantage SBI

The State Bank of India has created around $5 bln in new mortgages since it introduced the low initial EMI scheme where the first year rate is a 2% less than the EMI rate fixed for the borrower. Given that RBI has asked it to make the 2% extra provisions even thought he credit rating of these loans is not delinquent, faced with the threat of a ratings downgrade fromthe Central Bank ( done as mattter of policy and national security and not released for transactions), the Bank will lose about $100 million in quarter’s profits. However indian Banks are riding the nation’s growth story well esp SBI, ICICI Bank and HDFC Bank as you can see in HDFC Bank results above

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