The State Bank of India (SBI) will make every effort in FY22 to maintain the momentum of recovering stressed assets in FY21, according to Chairman Dinesh Kumar Khara.
This will be facilitated by the deployment of prepackaged insolvency for resolution, court takeover and the formation of National Asset Reconstruction Company Ltd (NARCL).
India’s largest bank will wisely use all the collection options at its disposal, he said.
However, Khara stressed that it is too early to talk about a possible deterioration in the quality of banks’ assets due to the second wave.
“The Bank has experienced a sharp increase in stressed assets over the past two years. The overall effort to manage stressed accounts initiated during fiscal year 2019 was also completed during fiscal year 2020.
“However, the onset of the pandemic and the lockdown that followed in fiscal 2021 changed the dynamics of the recovery of energized assets. The bank has had to deal with a disruption of normal procedures at NCLT due to Covid-19 infections, â€the head of the SBI said in the latest annual report.
In addition, the Reserve Bank of India (RBI) has imposed a standstill clause for certain portfolios.
NPA reduction
“Despite all this, the bank managed to reduce the level of gross NPA (non-performing assets) by 22,703 crore by March 2021.
“The corporate segment saw the biggest reduction in the NPA at 18,530 crore, while the other segments were more or less stable,†Khara said.
The Bank’s gross NPA ratio thus fell to 4.98 percent from 6.15 percent last year.
Khara said SBI is comfortably positioned in terms of growth capital.
“Lending opportunities in promising sectors will be explored to diversify the portfolio and contain risks,†he added.
