State Bank of India, which is facing “credit discipline” issue in Andhra Pradesh and Telangana following their Governments’ call for farm loan waivers, on Friday said that repayment delays are spilling over to poll-bound States too.
Maharashtra and Haryana will see Assembly elections in the next few months.
SBI Chairperson Arundhati Bhattacharya said in the June quarter, SBI reported fresh slippages aggregating ₹1,959 crore in agriculture loans. Out of this, around ₹600 crore is from Andhra Pradesh and Telangana.
“We believe it is necessary for people to have credit discipline. We also believe these are two States where there is a lot of potential. Unless they are able to access bank finance, they will not be able to come up to the potential.” “The problem is if one account of the borrower is classified as a non-performing asset then all his other accounts also get classified as non-performing.
“So, the agriculture slippage of ₹600 crore has also resulted in another ₹150 crore of slippages in retail (housing and gold loans). So, there is a spillover effect,” said the SBI chief.