Country's largest lender, State Bank of India sees no improvement in the investment front in corporate sectors, making SBI more cautious on lending to large and mid-corporate segments.
The bank plans to tighten entry norms for mid-corporates by making the credit selection process stricter.
Mr. R Venkatachalam, Deputy Managing Director and Group Executive-Mid-Corporate of said the bank would provide loans only to companies which fall under "investment grade or above" in both these segments.
"We are going only for investment grade and above companies. In fact, in the last three-four months we have not been lending to companies which are below investment grade," Mr. Venkatachalam said.
Chairman, Mr. Pratip Chaudhuri, said, "The mid-corporate segment is still reeling under pressure due to difficult economic conditions. Lower profitability is rendering it difficult for the companies in the segment to service their interest liability."
Around 85-88 per cent of the bank's total lending to the sector is to companies above investment grade or above (BBB rating or above).