 "SBI, chairman, rajnish kumar")
State Bank of India Chairman Rajnish Kumar said on Thursday that the economy had recovered since June, but cautioned aviation, tourism, hospitality and entertainment continue to be stressed.
Kumar, who was speaking at Business Standard’s Unlock BFSI 2.0 round-table, said that there has been no pressure from the government for banks to support the loan guarantee scheme for micro, small and medium enterprises (MSME).
“There was no pressure from the government to support the MSME scheme. The scheme was designed in consultation with us. It is a well-designed scheme, which is why it is so successful,” said Kumar, who spoke at the event along with the outgoing MD of HDFC Bank, Aditya Puri.
Kumar and Puri spoke on the term loan installment moratorium, which ends August 31.
Puri said that the decision on moratorium by the government and the Reserve Bank of India was a good one since banks’ cash flows were getting affected, while Kumar said that the numbers differed from bank to bank.
“Nobody is asking the banks to waive interest. That question is being put to the centre and regulator. Banks are contractually bound to charge interest, we are not a charitable institution,” Puri said.
Kumar said that while demand for credit has not been high during the Covid-19 pandemic, the banks have tried to protect senior citizens from falling interest rates even as operational costs for serving savings bank account customers are high.
On bank consolidation, Puri and Kumar differed a little from one another. While Puri said that consolidation just for the sake of it will not help, and ownership does not directly co-relate to efficiency, Kumar said that public sector banks eventually become clones of one another, and supervising a large number of banks is challenging for regulators.
