MUMBAI: The State Bank of India (SBI) on Monday launched a week-long nation-wide special drive to seek out loan defaulters and loans classified as non-performing. The bank plans to involve as many branches as are needed to help resolve issues for loan defaulters.
“Anyone who is not a willful defaulter can come during this week to discuss and resolve their loan defaults and NPAs with State Bank of India,’’ said P K Malhotra, deputy managing director, in-charge of this initiative.
The drive will not be constrained by the size of the loan defaulter or the sector. Yet, since typically most of the large accounts declared NPAs by the bank already have a structured interaction mechanism for resolution of their case, most of those expected to participate in this first-ever week-long initiative will be small and medium enterprises. He declined to put a figure of how much the bank could net.
Also, SBI will continue to hold its quarterly mega e-auctions of properties, with the next one scheduled for June 12.
The bank’s main focus is to somehow reduce its NPAs by attracting to the branch those with repayment problems. SBI is not constraining itself of the mode of settlement. While specialised branches have trained and experienced staff, employees of other branches too have been given training on how to help resolve these issues.
“We are open to all methods of resolution – they can settle in cash, seek rescheduling of loans or even present their case for a moratorium,’’ said Malhotra, adding, “A borrower has to finally repay the loan – it’s best if it’s as painless as possible.
SBI has several specialised groups to deal with loan defaults and NPAs, including stressed assets management group, stressed assets recovery branch and Stressed Assets Resolution Centre (SARC). The bank reported 4.25 per cent of its loans, or Rs 56,725 crore, as gross NPAs as of March 2015, compared with 4.95 per cent, or Rs 61,605 crore, a year earlier. Gross NPAs declined Rs 5,266 crore between December 2014 and March 2015.
The bank’s mid-corporates segment of borrowers has the highest chunk of NPAs of 40.6 per cent, followed by 28.9 per cent by SMEs and 18.8 per cent by the agriculture sector. Retail, international and large corporate accounted for 4.5 per cent, 4.6 per cent and 2.6 per cent of total loans.