State Bank of India (SBI) sold non-performing assets (NPAs) worth ₹3,590 crore during 2013-14 to asset reconstruction companies (ARCs).
SBI Deputy Managing Director Soundara Kumar told Business Line the bank’s consideration for the sale was primarily in securities and a small portion in cash. Of the total sale value, ₹241 crore was in cash and ₹1,698 crore in security receipts. “The balance ₹1,892 was write-offs,” she added.
Large and mid-size corporate advances and high-end SME loan portfolios formed a basket of NPAs that were sold to four asset reconstruction companies. SBI Chairperson Arundhati Bhattacharya said that the NPAs could fetch good value as they were secured by pledged primary assets, guarantees and collaterals. This was the first attempt by the nation’s largest bank to sell off NPAs. Bhattacharya said the bank is rolling out a new internal architecture for risk reduction. The technology-driven system will be under a “risk officer” and encompass all trading functions, early review of quality of loan assets, a scoring model and physical inspection by controllers to branches. SBI is also setting up a “collection team” exclusively for the SME sector. The farm sector will be covered by 69,000 business correspondents.
The SBI Chairperson also said that this year the bank will install 4,300 new ATMs that can take deposits as well.
These are expected to reduce servicing and transaction costs. She further said the bank has appointed a consultant to train 40,000 of its staff members. Mandatory e-learning courses for employees will begin by August this year.