Money & Banking

SBI looking to reduce bad loans by 40% this fiscal

Anjana Chandramouly Bangalore | Updated on November 15, 2017


Banking behemoth State Bank of India wants to reduce 40 per cent of its stock of non-performing assets during this year, according to a top bank official.

“There could be blips month to month, but during the year we are focusing on at least a reduction of about 40 per cent in the stock of NPAs as on March 2012,” Mr A. Krishna Kumar, Managing Director, SBI, told Business Line.

As on March 31, 2012, SBI's slippages were at Rs 26,976 crore, up from Rs 18,145 crore in FY11. The bank's gross NPAs rose to 4.44 per cent (3.28 per cent in FY11), while net NPA was 1.82 per cent in FY12 (1.63 per cent in FY11).

He said that the bank hopes to achieve this by “concentrating at the grassroots level, by contacting customers and meeting them.”

Despite a significant increase in NPAs during the last fiscal, “on a quarter-on-quarter basis, there was quite a bit of a pullback because of initiatives such as setting up account-tracking centres and recovery teams, and “re-instilling in our staff the need to individually contact the borrowers,” explained Mr Kumar.

Rupee depreciation

Though it was too early to talk on the impact of rupee depreciation, he said that the RBI's directive asking exporters to convert 50 per cent of export earnings into rupee and keep it in the country was a good step. He pointed out that the RBI was also trying to encourage inflow of money through NRI/FCNR route by equalising the maximum rate you can pay on both the fronts.

“These measures would definitely take effect, but it is very difficult to expect an instantaneous effect,” said Mr Kumar.

On lending to telecom companies, he said that SBI did not have stress in the telecom sector. “As long as the applicants follow all the ground rules laid down by the regulator, we have no issues,” he added.


Published on June 07, 2012

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