The asset quality situation at State Bank of India (SBI) remains healthy and the faster-than-expected economic recovery may improve the lenders' balance sheets, the largest bank SBI Chairman Dinesh Kumar Khara said on Thursday.
As per the Reserve Bank of India (RBI) Financial Stability Report (FSR), the RBI observed that the Non-performing Assets (NPAs) may worst further due to pandemic COVID-19, and advised banks should make adequate provisions as the third quarter is going to be ended and loans go bad. The RBI warned banks should make more efforts to raise capital to grow loans.
It is to be noted that the Hon’ble Supreme Court had already directed the RBI that NPA classification would not be applied to any bad accounts affected due to COVID-19. RBI governor asked the banks to make enough provisions for these loans.
The SBI chairman, who was speaking after the listing ceremony for a USD 600 million bond issue on the India INX, said the coupon rate of 1.80 per cent at which the bonds were issued is the lowest since 2008 and a big confidence booster not just for the bank but also for the Indian economy.
The largest Bank's chairman told on the various restructure scheme floated by the RBI for the stressed accounts, "bank is analysing the cash flows of companies who have applied for the relief and will be taking a call based on the same".
Dinesh Kumar Khara, who took charge as the chairman of SBI in October 2020, said it is important for the lenders to keep in touch with their borrowers at this crucial time to help and counsel them as and when required.