In order to spread their risk amongst more borrowers, the public sector lender has started to reduce the proportion of the loan lent to their top borrowers. As an attempt the risk, during the last fiscal the lenders reduced the concentration of deposits by their top depositors.
Concentration of funds with a few customers increases the risk for lenders; however it is beneficial for a bank to cater to a few customers and to make maximum profits out of them.
Along with State Bank of India, the largest lender in the country few other public sector bank like Bank of Baroda, Punjab National Bank, Union Bank and Oriental Bank of Commerce have also brought down the proportion that they have lent to the their top customers.
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