Cash crunch af­fects Equitas op­er­a­tions

Banking Frontiers - - Pb & Sfb -

Equitas Small Fi­nance Bank is propos­ing to di­ver­sify its prod­uct port­fo­lio to sus­tain it­self in the wake of ad­verse con­di­tions in the mi­cro­fi­nance sphere fol­low­ing the de­mon­e­ti­za­tion. While the bank’s fi­nances have grown 40% to `1553.82 crore from `1115.12 crore in the pre­vi­ous fi­nan­cial year, it is fac­ing a sharp slow­down in the mi­cro­fi­nance busi­ness, ac­cord­ing to N. Ran­gachary, chair­man of the bank, who pre­sented the bank’s an­nual re­port for 2016-17. The large part of this growth has been for the pe­riod prior to de­mon­e­ti­za­tion, he added. The bank’s mi­cro­fi­nance ad­vances stood at `3293 crore as on 31 March 2017, with de­mon­e­ti­za­tion af­fect­ing loan dis­burse­ments in cash dur­ing Novem­ber and De­cem­ber 2016. Dis­burse­ment of loans was re­stricted to cred­it­ing in bank ac­counts, com­pared to ear­lier months when most of the loans were dis­bursed in cash. Also with cash crunch, the bank ex­pe­ri­enced in­creased delin­quency.

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