With reference to the report, "How SBI's super six puts its house in order" (August 18), while it is heartening that the efforts of State Bank of India (SBI) chairman Arundhati Bhattacharya are yielding results in reducing the gross non-performing assets (NPA) of the bank, this should be read along with her statement that sourcing of new loans as well as monitoring of existing assets are key to this.
The percentage of gross NPAs could be a misleading figure as this depends on the new assets added to the books. If one looks at SBI's actual NPA figure, it can be seen that the decrease in gross NPAs from March 2015 to June 2015 is only Rs 304 crore. Considering that Rs 56,725 crore was identified as NPAs in March 2015, the reduction in gross NPAs is less than one per cent of the bank's total NPAs.
It is high time the bank gave equal importance to new businesses booked while maintaining the quality of its existing assets and reviewing its performance periodically. The quality of assets should always be assessed in actual terms, not in terms of percentage.
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The percentage of gross NPAs could be a misleading figure as this depends on the new assets added to the books. If one looks at SBI's actual NPA figure, it can be seen that the decrease in gross NPAs from March 2015 to June 2015 is only Rs 304 crore. Considering that Rs 56,725 crore was identified as NPAs in March 2015, the reduction in gross NPAs is less than one per cent of the bank's total NPAs.
It is high time the bank gave equal importance to new businesses booked while maintaining the quality of its existing assets and reviewing its performance periodically. The quality of assets should always be assessed in actual terms, not in terms of percentage.
BCU Nair Kuthiathode
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number