BENGALURU: The farm loan waiver announced by the Maharashtra and Karnataka governments has led to some spike in the Non-Performing Assets (NPAs) in agriculture lending for State Bank of India. However, the bank said the NPAs in the retail segment were fewer than the corporate sector and it is not a cause of worry. In an interaction with The New Indian Express, Parveen Kumar Gupta, Managing Director (Retail and Digital Banking), SBI, said the bank has not yet assessed the impact of the farm loan waiver announced by the Karnataka government in absolute numbers as it is waiting for the entire scheme to be finalised. “As of now, the impact is not much... We need to wait and see how the scheme is announced.”
Talking about NPAs in the retail segment, he said, “There is very less NPAs or stress. While there has been a spike due to the farm loan waiver in Maharastra and Karnataka, if you look at the country as a whole, then things are alright.”
When asked whether the bank has become cautious in lending, he said, “We have the target given by the government for disbursement of loans. With the minimum support price going up and agriculture insurance scheme getting better for the farmers we do think over a period of time the agri portfolio will get a lot more risk mitigation and the growth should continue to happen.”
The SBI expects its retail loan business to witness 14% growth in the current financial year. The bank also said most of the growth will be from the personal segment which comprises home loans, auto loans and personal unsecured loan. According to the bank, 60% of its overall domestic loan book is from the retail segment and home loans alone accounts for 35%.
“If you see the last few years, most of the growth on the credit side has come from the retail segment. The corporate sector has been under a little stress as not much capital expenditure was happening. At the same time, retail particularly is doing good and retail personal loans has done very well for us,” said Gupta. Another reason for the growth of personal segment loans is the implementation of the Real Estate (Regulation and Development) Act. It has enabled the banks to lend money to both the home buyers and to the builder.