There is no magic wand to control bad loans: SBI chief
2 July 2014 10:14 PM GMT
State Bank of India (SBI) Chairperson Arundhati Bhattacharya on Tuesday said she does not have a magic wand to deal with bad loans, which soared to Rs 61,605.35 crore at the end of March.
Pinning hopes on the economy reviving, she said, ‘We are seeing some lessening of stress but...there is no magic wand, we have to work through our way. As the GDP goes up, demand goes up, the capital market will begin to respond, people are able to raise equity, we will see things becoming better.’
SBI's gross non-performing assets rose to Rs 61,605.35 crore, or 4.95 per cent of total advances, at the end of March from Rs 51,189.39 crore, or 4.75 per cent, in 2012-13. The bank's net profit tanked to Rs 10,891.17 crore in 2013-14 from Rs 14,104.98 in the previous financial year. ‘We are very much in control. We understand the challenges. We are working on various solutions,’ she said. On the interest rate, Bhattacharya said it is stable at this point.
Asked about fund-raising plans, she said, ‘I don't need it. I will have to check credit growth and then decide, (in) another four months. We would need it should there be lot of demand for credit.’
Once credit demand picks up, she said, ‘We have lot of options, including rights, QIP
and FPO, so everything is on the table. At this point of time, we have not finalised anything.’
SBI raised Rs 8,032 crore in January by selling 5.13 crore shares through a qualified institutional placement (QIP). On the fiscal deficit, she said, ‘Please don't have such a short-span view. You are only looking at April and May.
April and May are when the expenditure occurs, it's not when revenue accrues. Taking a very short-span view...is not very good.’ The fiscal deficit in the first two months of 2014-15 was Rs 2.4 lakh crore, or 45.6 per cent of the budget estimate for the financial year.
SBI will open 5,000 new ATMs to trim its financial burden
Even as the uncertainty over charging users for ATM transactions continues, nation's largest lender State Bank of India on Tuesday said it will be launching up to 5,000 new ATMs this fiscal. The move is aimed at helping improve the debit cards-to- ATMs ratio for the bank and may also possibly help it save money expended on ATM interchange fees. ‘We are planning to add about 3,000-5,000 ATMs this fiscal,’ Managing Director for national banking A Krishna Kumar told reporters on the sidelines of a bank event here. He said the number could also go up as it is the availability of the required number of machines which is the biggest issue when it comes to increasing the network. The bank closed FY14 with 43,515 ATMS and in spite of the large network, had paid an interchange fee of a whopping Rs 991 crore to other banks as the number of its customers using other bank ATMs was more than customers of other banks making use of the SBI network.
Kumar said this is because the SBI's ratio of ATM for every debit card is 1:2,500 as against the 1,500-1,700 for other banks, due to which queues get formed outside its ATMs and customers, who enjoy five free transactions at present, go to other banks' ATMs located nearby to save time.
On the pricing for transacting at ATMs, Kumar said the industry body Indian Banks Association had written to the Reserve Bank seeking charging customers for every transactions in the metros and other large urban areas, and continuing with free transactions in the semi-urban and rural ones.
It can be noted that SBI chairperson Arundhati Bhattacharya had in an earlier interaction favoured charging customers for ATM usage saying it was unsustainable for a bank like hers to continue paying other banks.
Pinning hopes on the economy reviving, she said, ‘We are seeing some lessening of stress but...there is no magic wand, we have to work through our way. As the GDP goes up, demand goes up, the capital market will begin to respond, people are able to raise equity, we will see things becoming better.’
SBI's gross non-performing assets rose to Rs 61,605.35 crore, or 4.95 per cent of total advances, at the end of March from Rs 51,189.39 crore, or 4.75 per cent, in 2012-13. The bank's net profit tanked to Rs 10,891.17 crore in 2013-14 from Rs 14,104.98 in the previous financial year. ‘We are very much in control. We understand the challenges. We are working on various solutions,’ she said. On the interest rate, Bhattacharya said it is stable at this point.
Asked about fund-raising plans, she said, ‘I don't need it. I will have to check credit growth and then decide, (in) another four months. We would need it should there be lot of demand for credit.’
Once credit demand picks up, she said, ‘We have lot of options, including rights, QIP
and FPO, so everything is on the table. At this point of time, we have not finalised anything.’
SBI raised Rs 8,032 crore in January by selling 5.13 crore shares through a qualified institutional placement (QIP). On the fiscal deficit, she said, ‘Please don't have such a short-span view. You are only looking at April and May.
April and May are when the expenditure occurs, it's not when revenue accrues. Taking a very short-span view...is not very good.’ The fiscal deficit in the first two months of 2014-15 was Rs 2.4 lakh crore, or 45.6 per cent of the budget estimate for the financial year.
SBI will open 5,000 new ATMs to trim its financial burden
Even as the uncertainty over charging users for ATM transactions continues, nation's largest lender State Bank of India on Tuesday said it will be launching up to 5,000 new ATMs this fiscal. The move is aimed at helping improve the debit cards-to- ATMs ratio for the bank and may also possibly help it save money expended on ATM interchange fees. ‘We are planning to add about 3,000-5,000 ATMs this fiscal,’ Managing Director for national banking A Krishna Kumar told reporters on the sidelines of a bank event here. He said the number could also go up as it is the availability of the required number of machines which is the biggest issue when it comes to increasing the network. The bank closed FY14 with 43,515 ATMS and in spite of the large network, had paid an interchange fee of a whopping Rs 991 crore to other banks as the number of its customers using other bank ATMs was more than customers of other banks making use of the SBI network.
Kumar said this is because the SBI's ratio of ATM for every debit card is 1:2,500 as against the 1,500-1,700 for other banks, due to which queues get formed outside its ATMs and customers, who enjoy five free transactions at present, go to other banks' ATMs located nearby to save time.
On the pricing for transacting at ATMs, Kumar said the industry body Indian Banks Association had written to the Reserve Bank seeking charging customers for every transactions in the metros and other large urban areas, and continuing with free transactions in the semi-urban and rural ones.
It can be noted that SBI chairperson Arundhati Bhattacharya had in an earlier interaction favoured charging customers for ATM usage saying it was unsustainable for a bank like hers to continue paying other banks.
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