State-run banks’ market share in loans to the micro, small and medium enterprises (MSMEs), a major thrust area for the Government, has dipped on aggressive play by private sector banks and NBFCs, a report said on Monday.
The share of the 21 public sector banks (PSBs) has fallen to 50.7 per cent as of June 2018, from 55.8 per cent in June 2017 and 59.4 per cent in June 2016, a quarterly report by Transunion Cibil and Sidbi has said.
The overall credit to the MSME segment grew 16.1 per cent for the year to June 2018, it said, adding PSBs reported a 5.5 per cent growth, compared with 23.4 per cent for the private sector competitors.
It can be noted that 11 PSBs are under the Reserve Bank of India’s prompt corrective action (PCA) framework because of earning pressures and networth concerns, which puts restrictions on lending.
The share of private sector banks has grown to 29.9 per cent in June 2018, against the 28.1 per cent in the same month last year, while the same for non bank finance companies (NBFCs) has grown up to 11.3 per cent from 9.6 per cent, according to the report.
Despite the aggressive growth, private sector banks and NBFCs fare better on asset quality as well, it said.