Unutilised working capital limits, as well as term loans aggregating about ₹5-lakh crore and sanctions pipeline of ₹1.20-lakh crore, are indicators of the likely credit growth that the State Bank of India (SBI) is to see in corporate loans, according to Chairman Dinesh Kumar Khara.

“We have got a situation where underutilisation of limits in case of working capital is as high as about 49 per cent. And similarly, the unutilised term loan stands at about 26 per cent,” Khara said. “And if we really add up these numbers, this will be somewhere around ₹5-lakh crore.”

Referring to capacity utilisation in the economy is at 75 per cent, SBI chief expects more corporates to look at the bank for availing credit facilities as compared to the options which were available in the past in terms of raising money from the securities market.

“Retail engine continues to do very well. We got decent visibility on mortgage loans, Xpress credit, etc. So, these are some of the reasons why I feel we should have a decent credit growth going forward. We will aspire to continuing this kind (15 per cent) of credit growth in the remaining quarters of the current year,” Khara said.

Jump in slippages

On slippages jumping to ₹9,740 crore in Q1FY23 against ₹2,845 crore in Q4FY22, the SBI Chief observed, “As the quarters progress, we normally get to see much better results and that is something which we are quite hopeful...”

He added, “In terms of asset quality, we don’t see any challenge because GNPA (gross non-performing assets) has come down (to 3.91 per cent from 3.97 per cent as at March-end 2022) and even net NPA is at 1 per cent (1.02 per cent). We have adequately provided for the stress which is there in the book.”

Loan book

He emphasised that there is hardly any challenge in the corporate loan book and that NPAs in the retail book is well within control.

“And SME is one area where we have NPAs, with part of it coming from the restructured book. We have already provided adequately for the restructured book which has come down from ₹32,000 crore (as at March-end 2022) to ₹28,000 crore (June-end 2022). And a significant portion of that is due to repayment of SME loans which were restructured,” Khara said.

He observed that the restructured Special Mention Account (SMA) book is behaving much better than what was expected. “So, that is the reason why I feel that shocks have been already taken care of and there is no reason to worry about as far as the (restructured) book is concerned,” Khara added.