SIDBI sees 3.6% jump in net profit for FY21 amid Covid; gross NPAs decline to 0.18%

SIDBI had recently earmarked Rs 200 crore for its newly launched Shwas and Arog schemes for MSMEs manufacturing Covid-related goods catering to MSMEs. (Image: SIDBI)

Credit and finance for MSMEs: Small Industries Development Bank of India (SIDBI) has reported a 3.6 per cent jump in its net profit to Rs 2,398 crore for the financial year 2020-21, from Rs 2,315 crore in FY20. Financial results for the year ended March 31, 2021, were declared during the bank’s 23rd annual general meeting on Friday. The bank also announced an 11.5 per cent increase in its net interest income to Rs 3,678 crore in FY21 from Rs 3,299 crore in FY20 even as non-interest income marginally decreased to Rs 944 crore from Rs 1,069 crore during the said period. SIDBI also reported a marginal year-on-year decline of 5.6 per cent in advances to Rs 1,56,233 crore as of March 31, 2021, from Rs 1,65,422 crore as of March 31, 2020. 

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The net profit growth assumed significance amid the Covid-related challenges faced by the MSME sector and the critical need for immediate credit sought by enterprises as lockdown imposed restrictions on production, and labour movement. SIDBI had launched schemes including SAFE, SAFEPLUS, AROG, and TWARIT during the period to support MSMEs.

“To respond to the emerging needs of the MSME sector, SIDBI continued with its developmental engagements including inter alia powering national missions through digital portals, setting up project management units in 11 states for strengthening the ecosystem, supporting 1700 Women Homepreneurs in 7 states, setting up 100 Swavalamban Connect Kendras to kindle the aspirations of youth / displaced population, as also setting up of Swavalamban Crisis Responsive Fund for MSMEs,” said Sivasubramanian Ramann, Chairman and Managing Director, SIDBI in a statement.

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The bank also reported a decrease in Gross Non-Performing Assets (GNPA) ratio by 45 bps from 0.63 per cent to 0.18 per cent — from Rs 1,040.84 crore to Rs 282.31 crore, and Net NPA (NNPA) ratio decrease by 28 bps from 0.40 per cent to 0.12 per cent, as on March 31, 2021 — from Rs 658.64 crore to Rs 185.25 crore. Provision Coverage Ratio (PCR), which represents the percentage of funds for a bank set aside for losses because of bad debts, improved 14.89 per cent to 93.24 per cent as of March 31, 2021, from March 2020.

SIDBI had recently earmarked Rs 200 crore for its newly launched Shwas and Arog schemes for MSMEs manufacturing Covid-related goods catering to MSMEs such as manufacturing oxygen cylinders, oxy-generators, oxygen concentrators, liquid oxygen, credit for MSMEs in manufacturing of products or providing services that are directly related to fighting Covid including pulse oximeters, permitted drugs, etc. The bank had last month revamped its liquidity scheme for Covid-hit MSMEs – Liquidity Support by Urgent Infusion of Funds Through Direct Finance Window (LIQUID) 1.0 to enable term loans for its existing customers for the purpose of executing new orders, purchase of raw materials, machines, and equipment, clearing unpaid creditors, etc.