State Bank of India would stick to its credit growth guidance of 16-18 per cent for the fiscal. “We are seeing some increase and some upsurge in credit growth in October and November and hopefully that should continue,” Mr Pratip Chaudhuri, Chairman of the bank, said here on Sunday .
On asset quality, he said that the bank's net NPA had peaked at 2.05 per cent. “We don't think it will go up sharply or go up at all.”
There was some stress in the agricultural sector, he said, adding that with the new harvest coming in, recoveries in agriculture have also improved. According to him, several sectors of the economy are under stress: aviation, distribution companies of the electricity boards, and to some extent textile sector — “because these companies had procured cotton at higher prices and the cotton prices have come down”, and some steel companies in the intermediate sector.
On recoveries, he said that at SBI, the focus was on selling some of the NPAs to asset restructuring companies, and co-ordination with other banks for sale or resolution of issues. “We are very increasingly taking recourse to legal measures like the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act and selling of properties,” said Mr Chaudhuri. He pointed out that the bank was, in fact, “persuading companies to sell off their non-core assets and bring their debt to more manageable levels”.
On interest rate cycle reversing, Mr Chaudhuri said that he did not expect it to happen right now. “Till the inflation becomes 7 per cent, I don't think the RBI would like to put brakes on its anti-inflationary measures,” he said.
On capital infusion into SBI, he said that it was in its final stages. “It may happen by December-end or latest by March 31, 2012.”
Kingfisher issue
All efforts are being made by the lender-banks to ensure that Kingfisher Airlines remains a viable airline, Mr Chaudhurisaid. SBI is the lead bank of the 13-bank consortium which has lent to the cash-strapped airline.
“Kingfisher is a very big and an important company. There are multiple lenders and it requires a lot of co-ordination and co-operation among all lenders. Even as late as yesterday (Saturday), there was a very high-level meeting with the company. So every effort is being made that the KFA remains a viable airline,” said Mr Chaudhuri. He, however, refused to comment on rumours about the company's CEO quitting, saying it was the company's internal matter.
On the Air India restructuring, Mr Chaudhuri said that it has been “blessed by the government and everybody is very keen that Air India remains a viable national airline of which the country is proud”.