27
Sunday
May 2018
3:11 PM IST
News Headlines
Home   | Main News   | International  | National   | Business   | Sports   | Special News   | Feature News   | Entertainment   | About Deepika 
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.


Xiaomi Redmi Note 4 to Go on Sale Today in India
Mukesh Ambani leads Forbes list of Global Game Changers
Petrol price cut by Rs 2.16 a litre, diesel by Rs 2.10
Nadda wants increase in manufacture of medical equipment
Jio impact: Idea reports Rs 328-crore loss in March quarter
Now, Mumbai world's busiest airport with only one runway
Reliance Jio Effect: Airtel Posts Smallest Quarterly Profit in Four Years Due to Price War
IRCTC introduces payment on delivery for train tickets booked online
SBI cuts loan rates on affordable housing
India's Royal Enfield May Be Looking To Buy Iconic Italian Superbike Maker Ducati!
RBI advises PSBs to have fair system for branch auditor appts
Lanka only leasing out oil tanks to India: Wickremesinghe
Amazon, Flipkart line up mega sale this month
'State check posts will go under GST; excise point may stay'
State GST Bill passed by 8 assemblies in April-May: Finmin
Terror attack victims blame social media
Money laundering: Spain probes ex-HSBC executives
SpiceJet's Thiruvananthapuram-Male flight from this month
LPG price hiked by Rs 2, kerosene by 26 paisa
Rupee rebounds 24 paise against dollar in early trade
ENTERTAINMENT
Concert in India: Justin Bieber excited !
 International Pop sensation Justin Bieber is thrilled to perform in India and it seems he cannot wait for his concert to begin in the country.  
Harry Potter and the Cursed Child to open on Broadway in 2018
Vinod Khanna's son remembers dad, posts nostalgic pic
Baahubali 2 takes India by storm
FEATURE NEWS
AIIMS MBBS Admit Card 2017 released
 Candidates who have applied for AIIMS MBBS 2017 can now download their admit cards from the official website at aiimsexams.org or mbbs.aiimsexams.org.
Applied for NEET? Here’s what you should take to the exam center
Suranga Model Water Harvesting
Rajendra Singh - The Waterman of India
SPECIAL NEWS
Cool-headed duck becomes latest Internet sensation !
 Tigers are fierce animals. But, a tiger of Australia's Symbio Wildlife Park had to give up all his efforts to get hold of a duck.
Kalolsavam 2017: Manju steals the limelight
A sparkling gem of an artist
7 steps to beat childhood obesity
Rashtra Deepika LTD
Copyright @ 2017 , Rashtra Deepika Ltd.