Sustaining growth key concern: Bhatt - Video

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A pro-active treatment of risk to manage non-performing assets (NPAs), challenges of the knowledge economy and need for scale are issues needing immediate attention as India moves to a higher growth trajectory, O P Bhatt, chairman, State Bank of India (SBI), said today.

"With an average GDP of 7.5% for the last five years, India is moving to a higher growth trajectory... The question nagging my mind is... Is the growth sustainable?" Bhatt said while presenting the theme for an FICCI conference on global banking here.

"With credit growth galloping at 30%, NPAs, both gross and net, are coming down. .. but are they coming down in absolute terms? Or are they at the same levels? Or are they rising in some banks?," he asked.

Underscoring his observation in the light of the US subprime crisis, Bhatt observed if there was a slowdown in asset growth, as at present, and no treasury income to make up for it, the problem would get compounded.

"The best financial experts could not predict the impact of the US subprime crisis. How many sub-primes are dwelling in India? A pro-active treatment of risk is supremely important," he said.

On sustainability of growth, Bhatt also listed as concerns the absence of a roadmap for investments into India, weak corporate debt market and the dilemma of the public sector banks to raise capital without the government losing control or direction.