State Bank of India chairman Dinesh Khara on Friday said that the lender is planning to create a COVID-19 loan book of Rs 10,000 crore for the healthcare sector and pharma companies in India. The move came after the Reserve Bank of India had announced some liquidity-boosting measures to boost the economy battered with second wave of coronavirus pandemic earlier this month.
The central bank said that it would make available an on-tap liquidity window of ₹50,000 crore under which banks can provide fresh lending support to a wide range of entities, including vaccine makers, importers of vaccines, COVID-related drugs and priority medical devices, hospitals, pathology labs, manufacturers and suppliers of oxygen and ventilators, logistics firms and patients needing treatments. The tenor of such loans will be of up to three years and offered at the repo rate, RBI announced. The facility will be available till March 31, 2022. This lending will get “priority sector classification” till repayment or maturity, RBI governor Skatikanta Das said.
The leading vaccine makers Bharat Biotech, Biological E and Serum Institute of India have already received credit-lines from India’s largest lender, Khara said during a press conference.”We are quite open to any such requirements and will be more than happy to provide it,” Khara added. However, he did not disclose the numbers disbursed to the pharma companies.
“When it comes to the COVID book which is expected to be created under the recent guidelines of RBI to healthcare sector, we are quite upbeat about it,” SBI chairman mentioned.
“We have come out with some schemes which will be rolling out soon this financial year,” he said, adding, “The pharma sector is cash rich, but we have over Rs 4,000 crore pharma book.
Bank of Baroda earlier sanctioned Rs 500 crore to vaccine maker Serum Institute of India.
Serum Institute of India, world’s largest vaccine manufacturer, would be manufacturing of Rs 75 crore doses of Covishield and 20 crore doses of Novavax by December, according to the data released by the central government. Bharat Biotech aimed to produce 55 crore doses of Covaxin by the year-end. Telangana-based Biological E would would ramp up productions to make 30 crore doses of Bio E subunit vaccine by the end of this year.
The Rs 50,000-crore funding is 9% of India’s total health spending of Rs 6 lakh crore under private final consumption expenditure in FY20, according to a report published by SBI. The liquidity to support entities including vaccine manufacturers and other medical facilities is the need of the hour.
State Bank of India (SBI) on Friday reported a whopping 81% year-on-year increase in net profit to Rs 6,451 crore for the quarter ended March 31. Net interest income increased by 18.9% year-on-year to Rs 27,067 crore in the last quarter of FY20. The loan book witnessed a 5% year-on-year growth, the bank said. The lender’s provisions and contingencies fell to Rs 11,051 crore during the quarter under review.The gross non-performing assets (NPA) declined 46 bps sequentially to 4.98% in Q4FY20.
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