The Hindu : SBI initiatives to reduce NPAs further

Online edition of India's National Newspaper
Wednesday, Jul 16, 2003

Business

Business

SBI initiatives to reduce NPAs further

By Our Special Correspondent

CHENNAI JULY 15. The newly-ordained 90-day provisioning norm will see the gross non-performing assets (NPA) of State Bank of India bloat by Rs. 1,000 crores, according to its Chairman, A. K. Purwar.

Notwithstanding this, SBI would be able to bring down the net NPA to 3.2 per cent by March 2004 and to 2 per cent by March 2005. A combination of initiatives ranging from asset upgradation to effective recovery would ensure that the bank was on course to reach the 2 per cent NPA level by March 2005, he asserted.

Fielding a range of questions at a press conference here today, the SBI Chairman said the bank had already brought down the net NPA to 4.5 per cent for the year ended March 2003 from 5.63 per cent in the preceding year.

Quizzed if the bank would participate in the proposed bond buy-back by the Government, Mr. Purwar said it all hinged on "attractive prices". In his reckoning, securities worth Rs. 5,000 crores were eligible for buyback. "It all depends on the bid price," he asserted.

To a question, he said the bank had indeed proposed a new product for the non-resident investors who had subscribed to the RIB (Resurgent India Bonds).

The bank had mobilised around Rs. 26,000 crores through the RIBs. These were coming up for repayment in a few months. SBI, he said, was keen to offer these NRIs an option to subscribe to a new product.

The new proposal, he said, awaited the Reserve Bank of India's approval, he added. Nonetheless, he said, the bank had fully tied up funds for Rs. 26,000 crores should the entire RIB money had to be repaid at the appointed maturity date.

The Chairman said the bank had 1630 ATMs (automatic teller machines) across the country. This would go up to over 3000 by March 2004. Mr. Purwar was confident that the SBI group (including the subsidiary banks) would be completely computerised by September 2004. About the possibility of SBI sharing its ATM network with other banks, he said talks were indeed on with some.

To a question, he said there was already some sort of a `loose merger' between the subsidiaries and SBI in terms of tech sharing, treasury operations and large value clients. "We do have the benefits of merger without formally merging," he pointed out.

On the credit card business, he said SBI had about 1.5 million cardholders. He indicated that the credit card business would report profit this year. Mr. Purwar said the bank was in parley with Visa and Mastercards to facilitate its cardholders to draw foreign currency while travelling abroad.

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