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finance | IST

Estimate recoveries Of Rs 11,000 crore this year, says SBI's Rajnish Kumar

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Rajnish Kumar, chairman of State Bank of India (SBI) shared his views and outlook on the moratorium number, loan growth, non-performing assets (NPAs), and the overall business going forward.

Rajnish Kumar, chairman of State Bank of India (SBI) shared his views and outlook on the moratorium number, loan growth, non-performing assets (NPAs), and the overall business going forward.
Speaking about MSMEs, he said, “In any case, NPAs are generally elevated in MSMEs. The overall book is also not very big in relation to the overall outstanding term loan. Maybe the most vulnerable section – MSMEs and lower end of the mid-corporates. Maximum NPAs if at all comes, it will come from this segment.”
In terms of loan growth, he added, “I consider 8 percent growth is possible and in all likelihood, we may exceed that estimate because a lot of high-value disbursements are also pending and project pipeline has also improved. Retail – we have seen very good growth in car loans, housing loans, the disbursements have gone up. So fairly good pipeline of disbursements and as the capacity utilisation improves, the working capital utilisation also will improve.”
When asked about the commentary in the conference call where he had indicated that perhaps net interest margins (NIMs) may not improve further from here, he replied, “That is true.”
Talking about recoveries, he said Rs 11,000 crore is our estimate for this year. “Many large accounts are in a very advanced stage of resolution - Bhushan Power and the housing finance companies (HFCs) plus a couple of power assets,” he added.
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On restructuring, he further mentioned, “It has to be case-to-case and realignment of rescheduling of term loan instalments to be aligned to the estimated cash flows because cashflows reception has happened not because of any mistake on the part of the borrower. I am not sure whether the restructuring will come or not but anything it will be something where you don’t repeat the mistakes of the past.”
“We have recommended from Indian Banks’ Association (IBA) that there is a case for reschedulement of term loans for a specific sector. It is very difficult to define who is impacted or who is not. One thing is very clear that it will be on account of COVID-19,” said Kumar.