Bad loan situation to improve by fiscal-end: SBI chairman

Bad loan
UNHEALTHY TREND: The credit cost in the country is high because the default rates are high.

New Delhi: SBI Chairman Rajnish Kumar on Saturday said most banks will be in a good position with respect to stressed assets by March and there is no dearth of liquidity in the system for lending. He added that there are opportunities to lend in sectors such as infrastructure and consumer lending as there is not much of a decline in demand from consumers.

“By March 31st, most of the banks will be in a good position with respect to stressed assets,” Kumar said at the 92nd Annual Convention of industry chamber FICCI here. On transmission of monetary policy, he said the banks cannot lower rates beyond a threshold due to asset liability mismatch issues.

Kumar stated that there is no shortage of capital in the system, but the corporates are not borrowing enough and not utilising their capacities well. On lending to the telecom sector for the next round of spectrum auctions, he said, “For us lending to the telecom sector for spectrum is completely unsecured. On paper it is secured as the auction is to be done by government but practically it is totally unsecured.”

“So in such circumstances, banks will have to evaluate carefully before lending to the sector as the probability of default is very high,” Kumar said.

Now you can get handpicked stories from Telangana Today on WhatsApp / Telegram everyday. Click these links to subscribe and save this number 9182563636 on your contacts.