State Bank of India (SBI) is comfortably placed as far as capitalisation is concerned, Dinesh Kumar Khara, chairman, told CNBC-TV18. The Bank has taken permission from the board to raise Rs 14,000 crore of tier-one capital by issue of Basel-III compliant bonds.
“As of now, we are comfortably placed when it comes to capital adequacy ratio (CAR), which is around 13.74 percent, but we have got some maturities coming up in AT1 & tier-two bonds in the current year, which are in the range of Rs 9,000 crore, but it is more of an enabling approval from the board. We will certainly be looking at raising tier-one capital during the current year,” Khara said.
On National Asset Reconstruction Company Ltd (NARCL), which is going to be set up by June 30, he said, “As far as the NARCL is concerned, as per the structure, the banking system is required to transfer accounts that are fully provided for and which are up the threshold level of Rs 500 crore. SBI will be able to transfer around Rs 20,000 crore to NARCL.”
On loan growth, he said, “Economic activity has started picking up again after the first week of June. With the increased pace of vaccination and unlocks happening, sentiments are improving and also rural sentiments are improving at a much faster pace. Therefore, sentiment improvement and pace of vaccination give us a better hope, and so we aim to achieve FY22 loan growth of 9 percent.”
On slippages, he said, “In this quarter, we have to give allowance to the fact that for almost one and a half months, there were huge restrictions on mobility. We are aware that the cash flows were also disrupted.”
On restructuring of loans, he said, “Even last year, when restructuring was there, not many large corporates came forward. However, I can see restructuring for the SME sector in FY22.”
The SBI Chairman also sees scope for growth in the retail segment.
He further said that SBI had no plans of investing in IDBI Bank.
For the entire management interview, watch the video.
(Edited by : Dipika Ghosh)