Financial Daily from THE HINDU group of publications
Thursday, Sep 11, 2003
Financial Daily from THE HINDU group of publications Thursday, Sep 11, 2003 |
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Money & Banking
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Interview SBI chief sees credit pick-up from Oct N.S. Vageesh
Mr A.K. Purwar
MR A.K. Purwar, Chairman, State Bank of India, doesn't give us the satisfaction of eliciting a sensational news break. A past master in the art of deflecting questions with a smile or a counter question, Mr Purwar is always guarded in his replies that are carefully crafted. Taking a few minutes off his crowded schedule in Chennai on Tuesday, Mr Purwar tackled a few questions on the sidelines of a press conference, with his customary caution. Why is credit offtake not picking up despite signs of economic recovery? As far as retail side is concerned, credit growth has been healthy. Our bank for instance, is growing at 40% in this area. As far as corporate lending is concerned, customers have become very efficient in their use of working capital funds. They also take recourse to cheaper alternatives such as commercial paper and other MIBOR-linked products, which is why credit in the conventional sense is not picking up. But I expect to see a lot of credit growth from October onwards - for two reasons. One - all our customers are discussing ambitious expansion plans with us. Secondly, a range of seasonal industries - sugar, rice mills etc., will start their activities at that time. We are targeting a 16% growth in credit this year and we expect to achieve it. Will you be cutting lending rates now? What is the volume of your sub-PLR lending currently? Lending rates are linked to deposit rates. There is no review of our lending rates immediately. Our sub-PLR lending (inclusive of agricultural loans, housing loans etc.) is about Rs 46,600 crore. Your bank's exposure in agriculture advances is still short of the prescribed benchmark of 18% of advances. Will you bridge the gap this year? We may. All out efforts are being made to increase our agricultural finance portfolio and bridge the shortfall. We have brought out three schemes this year. We are financing dairies aggressively across the country. We are substantially scaling up our operations in self-help group (SHG) sector. We are also bringing out a product for rural housing. What is the status of your bank's talks with other banks for ATM sharing? The talks have reached a very advanced stage. You can expect something on this very shortly. Does that mean you will call a halt to your bank's own ATM expansion? No. It does not mean that. It only means that we will be able to expand to newer areas and get more reach. What are SBI's plans for a second round of VRS? There are no plans for staff reduction. About 34,000 employees will be retiring in 3 years in the normal course. So there is some natural attrition. Our regular business as well as the forays into credit card, insurance, mutual funds will need manpower.
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