NPAs in corporate loans now under control, says SBI's Rajnish Kumar

Kumar said that not many borrowers were keen to take advantage of the scheme due to its cost implications

Non-performing assets (NPAs) in small-ticket loans remain on the higher side, even as corporate bad loans are largely under control, according to Rajnish Kumar, chairman of SBI.

“Corporate NPAs are under control. We have noticed some higher NPAs in small-ticket government scheme loans. In the agriculture sector, NPAs in Kisan Credit Card (KCC) loans are at par with Mudra loans,” he said. He was answering a question on NPAs, during an e-session organised by the Bharat Chamber of Commerce on Thursday.

In Mudra loans, gross NPAs were close to 15 per cent, he added. However, with a new digital model in place, NPAs in new loans were close to 10 per cent. 

In the last 15 days, SBI has sanctioned loans to about 200,000 MSMEs. Of this, nearly 60 per cent loans have already been disbursed, he added.

“Our data analysis shows MSMEs are managing this crisis well,” he said.

With Unlock 1.0, many businesses are now near-to-normal, operating with 75-85 per cent capacity, but more investment in the infrastructure sector was needed for growth to revive, Kumar pointed out, saying that sectors like aviation, tourism, and hospitality were still under stress.

“Based on my interactions with industries, I feel the recovery rate is improving and in Unlock 1.0, many businesses have come back to normal, operating at 70-80 per cent of their capacities. Some industries are also witnessing a growth in exports.”

“While the government package has created a favourable investment climate, recovery in certain sectors like aviation, tourism, and hospitality is slow. Investment needs to improve in sectors like roads and renewable energy,” he added.

On the issue of moratorium, Kumar said that not many borrowers were keen to take advantage of the scheme, given its cost implications.

“Our assessment shows that not many people want to increase their liability at this point,” said Kumar. 

The rural economy is doing better than most other sectors, and will play a crucial role in revival of the economy. With the expectation of a good monsoon and good kharif sowing, things will likely look better, he concluded.

Further, in the case of Jan Dhan accounts, nearly half the deposits were getting withdrawn within 15 days of depositing.