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Monday, Nov 11, 2002

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SBM seeks RBI nod to reveal defaulters

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STATE Bank of Mysore (SBM) has cast a net to snatch the wilful defaulters.

Equipped with powers under Section 13 of the Ordinance (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest 2002), the bank has issued 150 notices this far to the wilful defaulters. The bank is seeking the permission of the Reserve Bank of India for publishing the list of wilful defaulters.

Mr Sitarama Murthy, Managing Director, SBM, told this correspondent that he would move the board for engaging a `dependable and reputed agency' on asset management. Stating that the banks did not have the wherewithal for conduct of auction, valuers for assessing the property, security cover on the property, insurance, etc., he said it would be fit if the task were assigned to a credible agency such as IFCI, IDBI or any dependable agency in the private sector. `Such asset management agencies would further strengthen our recoveries', he added.

According to him, the bank's NPAs were under control and it was able to recover a good amount during the previous year. `But we could not prevent additions to the NPA list. This is because the industry has still not picked up', he said and pointed out that the bank had a sizable exposure in the coffee sector in Karnataka.

Apart from coffee, traditional agricultural crops have also been in trouble. Out of the total advances of Rs 5,100 crore, SBM's exposure to coffee was of the order of Rs 125 crore, while the agricultural advances amounted to Rs 700 crore.

Despite the seasonal nature of agriculture, Mr Sitarama Murthy stated that agricultural finance was a good alternative to other finances because the agriculturist would not leave his land and go away.

Tier II capital: The bank is contemplating Tier-II route after repaying in full the borrowings of Rs 75 crore, raised five years back.

Mr Sitarama Murthy said that the bank would take a fresh look at the situation after repaying the sum by January 2003. According to him, the capital adequacy ratio (CAR) was comfortable at 11.81 per cent, and the current year's projections showed that the bank would be able to sustain this level.

While stating that the market was comfortable, he maintained that the situation would be reviewed and determined by January next. He said that the matching investments made during the last five years would take care of the repayment. He neither quantified the amount that the bank proposed to raise nor the tenure of the issue besides stating that normally it ranged between 63 and 66 months.

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