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Updated: February 18, 2013 22:40 IST

We aren’t giving up hope on rate cut: SBI chief

Anuj Srivas
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Pratip Chaudhuri
Pratip Chaudhuri

State Bank of India Chairman Pratip Chaudhuri, on Monday, reiterated his demand for a cut in interest rates, arguing that it could serve as a boost for employment.

“We understand that the RBI has its own responsibility and so on. But we believe that the best way to go about it is to augment supply and lower interest rates. Making home loans cheaper … just look at how many jobs one home creates by itself,” Mr. Chaudhuri said, addressing reporters at a corporate outreach programme here.

“We are happy that the RBI has cut the cash reserve ratio though. We are not giving up hope,” he added.

Talking about the rising non-performing asset (NPA) situation, the SBI chief said that it was expected to settle down in the fourth quarter.

“Nobody wants NPAs to happen, but they happen. If the air is polluted, it happens. Much of it is because of the decline in the iron/steel and textiles sectors. As the mining bans get lifted in Goa, and we extend the repayment schedules of numerous spinning mills, we think that Q4 should be better in terms of NPAs,” he said.

The Kingfisher loan situation, on the other hand, could prove to be a ‘long complicated legal battle,’ according to Mr. Chaudhuri.

“We realize that negotiations so far haven’t gone well. We believe it will be different now because so far the approach was to try to help the airline turn around. The company has not shown enough energy now. It is now about realising the securities in a bid to minimise our exposure. We are not prepared to take a haircut and should be able to recover a good part of our dues,” he said.

Budget wish list

Asked about SBI’s budget wishlist, Mr. Chaudhuri said that a demand for a raise in the tax deducted at source (TDS) limit had been put forward.

“An increase in the TDS limit on fixed deposits to Rs. 25,000 from the present 10,000 is on the wishlist,” he said.

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