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Our Bureau

Mumbai, Oct. 1 State Bank of India is planning to build a parallel structure, within the bank, to focus on non-performing assets and recovery. The idea is to have a separate ‘bad bank’ and ‘good bank’ said a senior official of the bank.

Currently, the bank has the Stressed Assets Management Group (SAMG), which deals with NPAs in the corporate sector and Stressed Assets Realisation Centres (SARCs) for retail and SME sectors. The bank has 10 branches under SAMG and SARCs in 55 centres.

The SAMG branches handle accounts that have a credit limit of Rs 1 crore and above. The SARCs handle all small and medium business, and personal segment loans such as housing loans, consumer durables and auto loans.

SBI’s gross NPAs as on June 30, 2007 were Rs 10,758 crore (Rs 9,720 crore) and the percentage of gross NPAs to total advances was at 3.13 per cent (3.64 per cent). The net NPAs were at Rs 5,504 crore (Rs 4,832 crore) and the percentage to total advances was at 1.62 per cent (1.84 per cent).

Going ahead, the SARCs would be merged with the SAMG. “It would require a different kind of specialisation as the retail and SME accounts would be huge in numbers, though the amounts involved would be smaller,” the official said.

Each SARC centre handles about 3,000-4,000 accounts, which indicates the volumes in the retail and SME sectors, he pointed out.

More Stories on : Non-Performing Assets | Public Sector Banks | State Bank of India

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