The Hindu Business Line : SBI hopes to disburse Rs 6,000-cr agri loans

STATE Bank of India expects its agricultural loans to be Rs 6,000 crore (gross disbursements) in the current financial year, around 30 per cent more than last year.

Net of repayments, the bank's agricultural loans are expected to increase this year by Rs 3,000 crore, Mr A.K. Purwar, Chairman of the bank, said.

He said that SBI's agri loans suffered a 8 per cent gross default. He said that the agri loan portfolio was more attractive than loans to some of the `AAA' rated companies.

Mr Purwar was here in connection with the launch of a loan product for broiler (chicken) rearing in Tiruvallur, near Chennai. The bank intends to open 1,000 agri cells and 600 self-help group cells across the country, he said.

Mr Purwar ruled out tying up with other institutions for delivery of rural credit, saying that the SBI was capable of doing it on its own.

Asked about credit offtake in the first quarter, Mr Purwar said that it was up 18 per cent over the same period last year, but total outstandings were at about the same level as at the end of March last year. He said he expected a "double digit growth" in business in the first quarter of 2004-05.

Mr Purwar said that SBI was likely to acquire two banks "in Asia and Africa". He said that the bank's operations in Australia, Russia and Oman commenced in the last three months — the $ 250 million the bank raised in May was primarily to funds its overseas operations, Mr Purwar said.

He said that the bank would in the future look to acquiring loan portfolios from other banks. Asked if the bank had a sum of money in mind for buying portfolio, Mr Purwar said, "we first want to gain some experience."

He said that SBI had sold shaky loans worth about Rs 500 crore to asset reconstruction companies. "We were able to realise about 30 per cent of the money," he said.

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