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In worst case scenario we might touch 7.8-8% gross NPA, says SBI MD Ashwani Bhatia

Updated : September 01, 2020 03:27 PM IST

Reserve Bank of India (RBI) stepped in with several measures to cool yields, announced more operation twists, term repo operations of Rs 1 lakh crore and increased the amount of bonds that can be held to maturity. Ashwani Bhatia, MD of State Bank of India (SBI) -- who has recently returned to the fold after having spent the last few years successfully heading their mutual fund division, taking it to the top position by way of assets under management (AUM) -- shared his views and outlook of the bank.

As MD of SBI, Bhatia will head the IT and stressed asset resolution verticals.

Speaking about non-performing assets (NPAs), he told CNBC-TV18, “I guess it is still too early to arrive at that number. That will evolve over the coming months, but be sure the number we mentioned in our results, which was 9.5 percent of the book under moratorium – we stick to that number. Over the past few months, that number has been coming down.”

When asked whether banks needed to undertake further provisioning, he replied, “This is a moving number. As far as SBI is concerned, we have already provided for about Rs 3,000 crore at the end of Q1. As we move forward, we will decide on extra provisioning. Things are moving very fast on the restructuring.”

On operation twists from RBI, he mentioned, “There is no harm in swapping and the number that we are talking about are quite big. On SLR side itself, we get space in excess of Rs 80,000 crore and there will be good amount of saving on the interest also for the first LTRO that we had taken from the RBI. Both are very good positives for us.”

The loan stress would be more on the mid-segment and maybe the personal segment, he said.

In terms of gross NPAs, Bhatia stated, “Our net NPA currently is below 2 percent. Our gross NPA is around 5.8-5.9 percent. Even if you see a worst case scenario of around 2 percent going down, for us we may touch about 7.8-8 percent or so.”

Watch the video for more.

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