Banks' Stressed Assets Position To Improve By March: SBI Chairman

On Saturday SBI Chairman Rajnish Kumar said that by the end of the ongoing fiscal year, banks will be better off in respect of non-performing assets.

Banks' Stressed Assets Position To Improve By March: SBI Chairman

Also, at the same time, he points out that there is no liquidity crisis and banks are adequately capitalized to carry out lending activity. Sectors including infrastructure and consumer lending provide ample scope to lend as there is not a substantial decline in credit demand from consumers. But for the corporates he reiterated that they are not borrowing enough and also not utilizing their capacities optimally.

On the occasion of the 92nd Annual Convention of industry chamber FICCI, SBI chairman said, "By March 31st, most of the banks will be in a good position with respect to stressed assets".

Further in respect of transmission of key policy rate, Kumar said beyond certain threshold banks cannot lower their lending rate due to asset-liability mismatch.

On extending funds to the telecom industry for the next round of spectrum auction, SBI chairman 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," added Kumar.

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