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Wednesday, January 11, 2012

SBI sees surge in requests for corporate debt rejig

There has been a significant increase in requests for debt-restructuring from corporates of late, according to Mr A. Krishna Kumar, Managing Director, State Bank of India.

Speaking to newspersons after inaugurating a women-focussed branch here on Wednesday, Mr Krishna Kumar said such requests were coming in from many sectors, including agro-based industries and textiles.

“These include small and medium enterprises as well as big corporates,” he said. Apparently, the worsening economic scenario is responsible for this trend.

SBI is examining requests as some of them should be dealt with through the formal corporate debt restructuring route involving a consortium of banks.

On the issue of Kingfisher Airlines loan portfolio being declared as a non-performing asset, he said: “It is bound to have an impact on our balance sheet. But we should not have too much of pressure during this quarter.”

Referring to debt extended to airlines in general, Mr Krishna Kumar said these loans were too large to be restructured.


Even though bank has been willing to sanction loans to corporate, most of the businesses are not willing to take the sanctioned loans.

“People are not drawing the loans. We have a large number of sanctions on hand,” he said.

Credit growth, on the whole, however, was good and, for the full year, it could be at about 17-18 per cent he said.

To keep the net interest margins strong, SBI has been focussing more on retail deposits such as current and savings accounts. The net interest margin could be around 3.5 per cent or a tad higher, he added.

On the state of non-performing assets, Mr Krishna Kumar said the situation was not as bad as expected earlier.

The bank took special measures such as coordination of recovery of non-performing assets by deputy general managers, he added.

Special recovery teams consisting of officers and clerks have also been formed in the rural areas.


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