The State Bank of India on Wednesday said it was more comfortable on the issue of non-performing assets (NPAs) in the past month compared with the situation a couple of months earlier.
It has said so despite having recently declared the Rs 1,500 crore of loans it had extended to Kingfisher Airlines as NPAs. Some of these borrowings are to reflect in the December balance sheet.
The banks says having firmer control over NPA levels in a somewhat deteriorating repayment environment was partly possible due to special measures it took, such as sending teams from village to village, persuading the borrowers to pay.
"This was not a formal procedure and not used at this scale earlier. This time, we have taken a number of such steps to try control and monitor NPAs. We have institutionalised the recovery process, which brought some focus into the NPA issue," A Krishna Kumar, managing director, said here on Wednesday.
The bank has also deputed deputy general managers at important locations within each of its circles to monitor repayments, apart from starting account tracking centres across the country.
"This process has helped us bring down NPAs," he said on the sidelines of the inauguration of an exclusive bank branch for women customers, the ‘Vasundhara Jubilee Senorita Banking Center’, its second such in the country. He refrained from giving exact numbers.
CDR facility
With the slowing economy, the bank has started receiving a large number of requests from across the country, compared with last year, for the corporate debt restructuring (CDR) facility from small, medium and even large companies, Kumar said in response to a question on the issue. Most such requests are coming from the sectors of agri business, automobiles and textiles.
Kumar said the bank would consider these requests as far as possible. The process involved the views of a consortia of banks and borrowers, and was a mechanism monitored by IDBI. "We have done quite a few exercises in the past few months in this regard and have requested the cooperation of all the banks of the consortium," he said.
Coming to airlines, he said the borrowing was too large to come under the CDR process. So, the loans extended to Kingfisher were declared as NPAs by his chairman a couple of days earlier. He said the banks were working on the problem. Stating there was no plan to tinker with savings bank rates, he said deposit growth had been robust, to the extent that they had to ask their branches to discourage bulk deposits. However, the bank had been encouraging retail deposits as ever. The deposits were, in fact, helping the bank keep its net interest margin high and may ensure the year ends above 3.5 per cent indicated earlier.
The bank is expected to end the current financial year with deposit growth of 19-20 per cent and growth in assets and advances at 17-18 per cent. "Credit growth will not be beyond 18 per cent this financial year, as the same has been a bit low in the earlier quarters," he said. There was no stoppage in demand for credit but customers were waiting for softening of interest rates. "We have a large number of sanctions on hand but disbursements have not taken place because of this reason," he said. On foreign currency loans, he said SBI would not be majorly affected due to the recent currency fluctuations, as it would ask borrowers to hedge the foreign currency component or take other security at the time of loan sanction.
