Editor's Take: Why low slippages could trigger a relief rally in SBI

State Bank of India (SBI) has given a clear breakup of slippages; the estimated slippages for the second half is about Rs 20,000 crore.

When you add everything, the possible stress plus NPA is around Rs 60,000 crore. For a bank with a large book, this works out to a 2.5 percent slippage as a percentage of the total book.

When the RBI financial stability report came in, it reported that the stress could be anywhere between 5 and 7 percent for the banking system. SBI being the largest bank was expected to reflect that. But SBI is telling us that the figure is 2.5 percent.

There could be a relief rally coming in SBI because of the lower than expected slippages.