SBI says NPAs to grow for some more time

Ther nation's largest lender State Bank of India (SBI) said here today that its non-performing assets (NPAs) will continue to grow for more sometime, reflecting that all sectors of the economy have not recovered fully.

"NPAs will continue to grow for sometime," said SBI Chairman O P Bhatt, adding however, the bank expects bad debts to come down to 2.85-2.95 per cent of total loans by the end of this fiscal from 3.11 per cent as on December 31.

Bhatt's comments imply that all sectors of the economy are not doing well, even as the economy is expected to grow 7.2 per cent this fiscal. As such, recovery of loans by SBI will take a hit.

Bhatt also said the Reserve Bank of India (RBI) is quite receptive to banks' suggestion on extending the deadline for meeting the 70 per cent provisioning requirements for NPAs.

The central bank has asked banks to keep capital aside to the tune of 70 per cent of their gross NPAs by September, 2010.