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State Bank of India is lending Rs 2,500 crore to Rashtriya Ispat Nigam Ltd (the Visakhapatnam steel plant) for the expansion project and the procedural formalities will be completed on Tuesday, according to SBI Chairman Pratip Chaudhuri.
He was talking to reporters here on Monday evening after donating three ambulances to local organisations as a part of its corporate social responsibility and also after opening a specialised currency administration branch here, the first in Andhra Pradesh.
He said the SBI’s loan to the RINL “is the biggest contribution we are making to the industrial development of this region in particular and Andhra Pradesh in general. So many ancillaries will be coming up in the vicinity of the RINL and the SBI’s contribution therefore cannot be overemphasised.” He said the rate of interest would be 9.7 per cent or 9.95 per cent for the loan.
Apart from the loan to the RINL, “We have lent Rs 6,200 crore to others in the three districts of Visakhapatnam, Vizianagaram and Srikakulam comprising the Visakhapatnam zone and the deposits are Rs 8,000 crore.”
In response to a question on the loan given to Kingfisher Airlines, he said the bank was calling back the loan and taking legal steps. “All the banks put together have lent Rs 6,000 crore or so and our exposure is Rs 1,600 crore or so. We have asked the management to revive it, but there seems to be no such possibility and therefore we have to take legal action to recover our money,” he said and added that even though “the bank is open to the idea of reviving the company in view of the large number of employees involved, if there is a viable proposal.”
CSR
He said the bank was laying a lot of stress on CSR activities and “we have to spend 1 per cent of our profit on corporate social responsbility projects and during the current financial year we have to spend Rs 118 crore and we have already spent Rs 114 crore and the remaining Rs 4 crore will also be spent before the end of March.”
He said the SBI had recruited 20,000 junior staff, of which 14,000 had joined. The bank had also called for applications to posts of 1,500 probationary officers, for which it had received 15 lakh applications. The process of recruitment would be over by June or July.
On competition from private banks, he said his bank was ready for it and it had at present 17 per cent market share. On the issue of merger of the subsidiaries, he said it would take at least a decade for all the subsidiaries to be merged. The State Bank of Hyderabad being the largest would take a considerably longer period.
In response to a question on attrition rate, he said it was in the range of 25-30 per cent among the junior staff, “as our salaries are lower in comparison with private companies and the staff have to work in rural and semi-urban areas.” However, there was no problem as the bank was always keeping a reserve of junior staff, he added.
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