STOCK MARKET BSE NSE

NPA scenario to improve by March end: SBI chairman Rajnish Kumar

State Bank of India chairman Rajnish Kumar on Saturday said most of the banks in the country will be in a good position with respect to stressed assets by the end of March. 

Published: 21st December 2019 11:07 PM  |   Last Updated: 22nd December 2019 10:56 AM   |  A+A-

Rajnish Kumar, Chairman of State Bank of India (Photo | Reuters)

By Express News Service

NEW DELHI:  State Bank of India chairman Rajnish Kumar on Saturday said most of the banks in the country will be in a good position with respect to stressed assets by the end of March. 

He said the banks cannot go beyond a threshold to bring down interest rates on deposits as India lacks social security schemes; and likewise, cannot lend at lower rates to corporates as the risk of default is too high.

“By March 31, most of the banks will be in a good position with respect to stressed assets,” Kumar said at the 92nd Annual Convention of industry chamber FICCI.

After showing some signs of recovery, as many as 10 banks, including SBI, has disclosed that they had under-reported non-performing assets (NPA) close to Rs 24,000 crore.

“We have repeatedly mentioned that the banking system’s dependence ... in India is largely on depositors. Today, 90 per cent of my deposit is retail deposit. If I want to lend money cheap, obviously I will have to pay less to depositors; and in a country like ours, where there is huge population of senior citizens, and in the absence of social security schemes, the interest on deposits is a source of earning,” Kumar explained.

Reassuring that there is no dearth of liquidity in the system for lending, he added that the problem is that “corporates are not borrowing and not utilising their capacities well.”

On lending to the telecom sector for the next round of spectrum auctions, he said it is “completely unsecured” and in such circumstances, “banks will have to evaluate carefully before lending to the sector as the probability of default is very high.” 



Comments

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 newindianexpress.com 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 newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com 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. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp