SBI chief sees bad loan provision falling after two quarters

India's banks have been plagued by a surge in non-performing loans which hit a record $150 billion at the end of March.

Published: 12th October 2018 04:45 PM  |   Last Updated: 12th October 2018 04:45 PM   |  A+A-

State Bank of India (SBI) Chairman Rajnish Kumar. (Photo: Reuters)S

By Reuters

NUSA DUA, INDONESIA: State Bank of India, the country's largest lender, sees its provision for bad loans remaining high for at least the next two quarters, after which it will start softening as it steps up efforts to improve asset quality, its chairman said on Friday.

The state-run lender is also seeing a slowdown in "accretion" of new bad loans, Rajnish Kumar told Reuters on the sidelines of the International Monetary Fund (IMF) meeting at the Indonesian resort island of Bali.

India's banks have been plagued by a surge in non-performing loans which hit a record $150 billion at the end of March. Twenty-one lenders led by SBI, in which the Indian government owns a majority stake, accounted for 86 percent of the pile.

"Whatever is the provision coverage...that will still remain elevated for at least two quarters and after that it should start tapering off, the requirement to do more coverage," Kumar said. "Overall, NPAs (non-performing loans) are under control."

SBI, which accounts for about a fifth of India's banking assets, saw its provisions for bad loans rising 7.5 percent in the June quarter from a year earlier, pulling it to its third straight quarter of losses.

The lender is one of the top shareholders in India's ailing shadow banking firm Infrastructure Leasing & Financial Services (IL&FS), which has been taken over by the government on worries about the impact of its collapse on the financial markets.

"There are some projects where they have disputed claims. They really need to determine very quickly, which I'm sure the new board will be doing, how much money is recoverable and if there's any gap then how do we address that gap."

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp