MUMBAI: Stringent RBI norms proposed for corporate lending are expected to nudge banks towards consumer loans, SBI Chairperson Arundhati Bhattacharya has said while reiterating that there is no bubble in the retail segment.The Reserve Bank had last month come out with draft guidelines on credit to large corporate borrowers asking banks to make additional provisions if the loan amount crosses the prescribed limit. "The latest norms regarding lending to large corporates make corporate lending more costly both for banks as well as the borrowing companies," Bhattacharya told PTI in an interview. Therefore, if stress starts building up we can see that very quickly," the SBI Chairperson said. So, obviously these are people who need these loans in order to fulfil their very many aspirations. "Former RBI governor Raghuram Rajan had raised concerns about lenders, especially state-run banks, shunning project loans and aggressively targeting retail loans.Bhattacharya said growth numbers of retail segment which she sees at SBI or other peers and NBFCs do not show any major stresses build-up.

Source: Economic Times September 11, 2016 06:11 UTC