Covid-19 crisis: It's time for concrete revival plan, says SBI chairman

Rajnish Kumar said, "a certainty on regulatory stance, and support that may be coming from the government, is required as we are now in the exit phase of the lockdown."

With the Covid-induced nationwide lockdown likely in its last leg, the time is ripe to come up with a concrete plan for economic revival and support, State Bank of India Chairman Rajnish Kumar has said.
 

Banks are working on measures to provide assistance to customers impacted by the economic disruption.
 

“A comprehensive and concrete plan should come now,” Kumar told Business Standard. “A certainty on regulatory stance, and support that may be coming from the government, is required as we are now in the exit phase of the lockdown.”

Asked about the nature of plan, he said it would depend on what would be the exit plan for the lockdown, and how activities would resume. “There has been a lot of learning. Now all are aware Covid is not going away so soon. In my view, time for coordinated action is now,” he added.

In March, the Union government came up with an economic support package worth Rs 1.7 trillion. Also, the Reserve Bank of India has announced a slew of steps, including a refinance window to provide liquidity to banks.

The banking regulator has also allowed banks to grant a moratorium on term loans for three months for borrowers facing cash flow problems. Referring to the current interest rate trend, the SBI chairman said interest rates were low and there was a possibility that they would reduce further. But purchases have stalled, be it houses or cars, and retail lending has completely stopped, he said.
 

There is stress building up in small-ticket loans (Mudra). “We try to ensure that these loans are used for increasing productivity, but they are used for consumption. For SBI, around 25 per cent of the Rs 27,000-crore Mudra loan book is NPAs,” he said at an event.
 

Kumar said despite the coronavirus crisis, bank staff were coming to branches, and work was happening without much disruption, except when local authorities ordered to close operations.