PSBs Well Positioned To Provide Credit Of $60bn To $100bn: Lotusdew Wealth

According to Lotusdew Wealth, a smallcase manager, the public sector banks have the liquidity capacity to provide credit value at USD 100 billion. As of March 2022, cash and balances with RBI for Public Sector Banks are at USD 70 billion (Rs. 6.22 lakh cr.) when compared to USD 60 billion (Rs. 5.4 lakh cr.) as of March 2021. For Private Banks, cash and balances with RBI stood at USD 45 billion (Rs. 3.93 lakh cr. ) vs USD 35 billion (Rs. 2.9 lakh cr.) (YoY).

This indicates that cash and balances with RBI are nearly 60% higher for PSU Banks when compared to private banks. The balances with banks and money at call with RBI for PSU Banks is USD 80 billion (Rs. 6.42 lakh cr.) vs Rs. USD 75 billion (5.91 lakh cr.) (YoY). The balances with banks and money at call with RBI for Private Banks are at USD 40 billion. (Rs. 3.34 lakh cr.) vs USD 35 billion (Rs. 2.75 lakh) cr. (YoY). "This indicates the balances with banks and money at call with RBI are over 90% higher for PSU Banks over Private Banks. With a liquidity ratio of 4.5%, there is a liquidity cushioning of USD 45 billion when put into effect of a 2.5x multiplier allowing the public sector banks to provide an upper base of USD 100 billion credit offtake," Lotusdew Wealth, the smallcase manager stated.

Providing details on the various smallcases portfolio, Abhishek Banerjee, smallcase manager & Founder, Lotusdew said "Our smallcases like Listed Venture Capital, Nanocap Champs, and Golden Opportunities take advantage of financial conditions prevailing in the market by going for capital market-related companies like brokers who enjoy income from the free float in rising interest rate environment."