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There can be collateral damage to portfolio on account of farm loan waivers, says Ujjivan Small Finance Bank

Updated : January 01, 2019 11:20 AM IST

Farm loan waivers could have a collateral damage to portfolio, said Samit Ghosh, managing director and CEO, Ujjivan Small Finance Bank in an interview to CNBC-TV18.

He said that a number of us (small finance banks) are lending to a lot of microfinance institutions (MFIs) institutions who don’t have asset liability management (ALM) issues.

“In fact in December we did about Rs 100 crore of loans to various NBFCs ranging from MFIs, auto finance, school finance etc.,” he added.

On growth front, Ghosh said, “In Q3 and Q4 we expect significant growth. In asset business, our growth is around 25 percent and deposits are also growing.”

Talking about farm loan waiver, he said, “With intense political competition coming up after the mid-term elections, the loan waiver mantra has escalated to a different level and so we are concerned about it.”

“Historically, we have never faced this problem because most of our loans are not in the farm loan category but there is concern that there can be a collateral damage,” he further added.

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