The entire ecosystem of the country has to respond to deal with the issue of wilful defaulters, MD and CEO of Vijaya Bank Kishore Sansi has said.
“The recovery efforts by going to the court and getting orders for security are becoming difficult because of old and complicated legal system. This was represented to the Ministry of Finance, and the Minister has agreed to review the operations of debt recovery tribunals (DRTs),” he told The Hindu after inaugurating a new branch of the bank at Lawson’s Bay Colony here.
The recovery was becoming difficult with prolonged legal process. While DRTs had provided good relief, there were a limited number of DRTs and presiding officers, he noted.
Cheaper home loan
“Though the DRTs are supposed to give a decision in six months, unfortunately it is taking more than four to six years with the decisions being challenged in higher courts,” Mr. Sansi said.
With prediction of good monsoon, repo rates are going to ease and with the introduction of marginal cost of lending implemented from April 16 by all banks, there would be more transparency in giving benefits to the end-borrowers.
“I believe there would be a reduction of at least 50 basis points in the repo rate by March 2017, making home loan cheaper,” Mr. Sansi said.
He described the banking scenario as a little difficult owing to turbulence in the global economy, and manufacturing and economic activity yet to pick up to full potential. The credit requirement had been muted with 10 per cent year-on-year growth, which was among the lowest in the last few years.
With the initiatives taken by the government with regard to availability of gas and power infrastructure and road projects, the sectors would get revived soon, he hoped.
With certain domestic and international issues, steel and textile sectors are under pressure. Most of the stressed assets are in the steel category. It has become a global phenomenon owing to glut produced by China. The steel industry and borrowers are looking at the government to announce a concession package, Mr. Sansi said.
‘NPAs comfortable’
Vijaya Bank’s position with regard to non-performing assets until December 2015 is comfortable.
“We are with the lowest NPAs among the PSU banks. In the last quarter, with asset quality review by the RBI, certain big assets have become NPAs in other banks, impacting Vijaya Bank,” he said.
As on December 2015, the net NPAs are 2.98 per cent and gross NPAs 4.45 per cent. In spite of that, the bank has seen a good credit growth.
Capital Adequacy Ratio is good. Recently, the bank borrowed Rs.226 crore from the GoI, Rs. 225 crore from the LIC through preferential route, and Rs. 600 crore in Tier I bonds from the REC. With the provisional figures as on March 16, the CAR would be 12 per cent as against the minimum of 9 per cent stipulated by the RBI, Mr. Sansi added.
