Unused working capital limits, as well as term loans of about ₹ 5 lakh crore and a penalty pipeline of ₹ 1.20 lakh crore, are indicators of the likely credit growth State Bank of India (SBI) will see in corporate loans. according to President Dinesh Kumar Khara.
“We have a situation where the underutilization of the limits in the case of working capital is about 49 percent. And similarly, the non-performing loan stands at about 26 percent,” said Khara. “And if we actually increase these numbers, it will be around 5-lakh crores.”
Stating that the capacity utilization in the economy is 75 percent, the president of SBI expects more companies to look at the bank to take advantage of credit facilities compared to the options that existed in the past in terms of raising money from the securities market.
“The sales engine continues to be very good. We have taken a reasonable view on mortgage loans, Xpress credit, etc. So, these are some of the reasons why I feel that we should have a reasonable loan development. We will hope that with this (15 percent) credit growth to continue in the remaining quarters of the current year,” Khara said.
Enter the slippages
On the lines which came in at ₹9,740 crore in Q1FY23 against ₹2,845 crore in Q4FY22, the SBI head said, “As the quarters progress, we generally see much better results and that is something that we very hopeful…”
He added, “In terms of asset quality, we do not see any challenge as GNPA (non-performing assets) has come down (3.91 percent from 3.97 percent at end-March-2022) and there is even a net NPA . 1 percent (1.02 percent). We have provided enough stress that is in the book.”
He emphasized that there is no major challenge in the company’s loan book and that NPAs in the sales book are well under control.
“And SME is an area where we have NPAs, part of which comes from the restructured book. We have already made enough provision for the restructured book which has come down from ₹ 32,000 crore (as on March-end 2022) to ₹ 28,000 crore (June-end 2022). enough. And a significant part of that is due to the repayment of restructured SME loans,” Kara said.
He found that the restructured Special Address Account (SMA) book was performing much better than expected. “So, I feel the shocks have already been taken care of and there is no reason to worry about the (re)book,” Khara added.