25
Monday
September 2017
9:48 AM IST
News Headlines
Rahul 'thanks' Sushma for recognising Cong legacy        Bangla govt dismisses reports about plot to kill Hasina        India beat Aus by 5 wkts to clinch ODI series, grab No. 1 spot        Pak's UN envoy tries to pass off Gaza image as Kashmir        Kerala minister Thomas Chandy rejects encroachment charges; opposition press for resignation        Shiv Sena takes to streets against inflation, fuel price hike        Journalist KJ Singh, mother found dead: Punjab Police sets up SIT to probe case, IJU condemns the murder        We created institutions of excellence, Pakistan created terror factories: Sushma at UN General Assembly        Early count puts Bill English ahead in New Zealand election        Another powerful aftershock jolts Mexico with 6.1 magnitude        Pakistan name five upcapped players in 16-man squad for Sri Lanka Tests        Rajasthan's 'Falahari Baba' arrested for rape        LDF entry of BDJS: : Kanam breaks silence        Chandy issue: Achuthanandan takes a dig at Pinarayi        Malappuram genital chopping case: Police confused        Injustice being done, says Manju        Thomas Chandy alleges conspiracy in encroachment row        Medium-intensity earthquake in Kashmir Valley        IRCTC denies reports of some banks cards barred for payment        We don't indulge in vote bank politics: Modi        
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Business News
Bad debt situation not that grim, recovery hopes intact: SBI
 
Yokohama (Japan), May 6 (PTI) State Bank of India, the country's largest lender, today said most of the nation's bad loans belong to industries that are still in business and banks will probably recover the writedowns when growth turns up and they perform again.

Speaking at a seminar on 'Asian Banking in Challenging Times' here, SBI Chairman and Managing Director Arundhati Bhattacharya said the loans which have turned bad are because they are not producing enough money to cover their interest liability.

And the reasons for that have been huge time overruns, leading to cost overruns, which lead to over leveraged positions, she said.

About 16.6 per cent of loans to corporates or about 8.4 per cent of the GDP had been declared nonperforming, according to Credit Suisse.

Banks are straddled with anywhere between Rs 9 lakh crore to Rs 12 lakh crore of stressed assets made up of bad loans, restructured debt and advances to companies that cannot meet servicing obligations.

The government yesterday through an ordinance amended law to give powers to the Reserve Bank of India (RBI) to order banks to initiate insolvency proceedings against defaulters and to create committees to advise them on recovering non performing loans.

"I still believe we have huge potential in the country.

The difference of the NPLs (nonperforming loans) this time around is the fact that many of the NPLs are assets that are still working," she said at the seminar held on the sidelines of annual meeting of the Asian Development Bank here.

To set this NPL cycle right would need dilution of equity, paring down of debt and finally leaving the asset with debt that ensures that it can be sustainably serviced, Bhattacharya said, adding this will ensure that these units get the support to enable them to raise their capacity utilisation.

"In view of the fact that our economy is still growing so there is demand over there which has to be properly nurtured and may be also channelised. If you do that, many of these units will probably come back and the writedowns that we will take will probably, not surely, but probably, we will be able to claw back at some point of time," Bhattacharya said.

She said the Indian banking sector faces headwinds both in respect of overleveraged corporate debt and "stiffer" regulatory requirements.

The biggest challenges faced by the regulators, she said, was how to handle the bad debt situation to ensure that the resources are not wasted.

"On the other hand they have to ensure that they are perceived as being conservative and they are perceived as doing the right thing for right reasons. So I think this is the challenge that we as a country have and the regulators have as well," Bhattacharya said.


Indiabulls Housing Fin raises Rs 2,000 cr via bonds
Govt seeks asset valuer for Air India stake sale
'Railways looking at ways to speed up electrification process'
'Tax on fuel more important for a dry state like Gujarat'
Working with FinMin, Niti Aayog to resolve exporters' issues
WEF: Davos meet to focus on cooperation in fractured world
18 of the 43 McDonald's outlets in capital reopened: Bakshi
Heavy rains halt operations at airport, many flights affected
Manmohan takes potshots at note ban, 'hasty' rollout of GST
Fuel prices may come down by Diwali: Pradhan
Forex reserves top $40000 crore for FIRST time
PM Modi and Japan's Abe launch Indian shinkansen project
'India well on path to produce 50 cr mobile phones by 2020'
Cong hits out at centre over petrol prices
15 Japanese firms to invest in Gujarat
70% people want scrapped Rs 1000 note back, claims survey
Rupee recovers 6 paise against dollar in early trade
Sensex gains 57 pts in early trade despite rising inflation
'Govt to focus on water grid, highways-cum-airstrips'
IndusInd Bank, Bharat Fin gain up to 5.5% on merger talks
KERALA NEWS
LDF entry of BDJS: : Kanam breaks silence
 (Malappuram, Sep 23, 2017, DG): CPI State Secretary Kanam Rajendran today invited BDJS into t  
Chandy issue: Achuthanandan takes a dig at Pinarayi
Malappuram genital chopping case: Police confused
Injustice being done, says Manju
INTERNATIONAL NEWS
Bangla govt dismisses reports about plot to kill Hasina
 (Dhaka, Sep 24, 2017):The Bangladesh government today dismissed as "baseless" media reports t
We created institutions of excellence, Pakistan created terror factories: Sushma at UN General Assembly
Early count puts Bill English ahead in New Zealand election
Another powerful aftershock jolts Mexico with 6.1 magnitude
NATIONAL NEWS
Rahul 'thanks' Sushma for recognising Cong legacy
 (New Delhi, Sep 24, 2017):Congress vice president Rahul Gandhi today thanked External Affairs
Shiv Sena takes to streets against inflation, fuel price hike
Journalist KJ Singh, mother found dead: Punjab Police sets up SIT to probe case, IJU condemns the murder
Rajasthan's 'Falahari Baba' arrested for rape
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