SBI to focus on cutting NPAs under new Chairman Pratip Chaudhuri

MUMBAI: State Bank of India's (SBI) priority will be to reduce bad loans under new chairman Pratip Chaudhuri , even as it aims to increase the share of term loans in its portfolio to improve profitability. The overall loans and deposits growth, which was lagging behind the industry , will also get the attention of the new chief who steps into the shoes of Om Prakash Bhatt, credited with shaking the slumber off SBI.

Restoration of a normal relationship with the RBI is also on top of Chaudhari's agenda, after his predecessor in his aggression to take home loans to the lower middle class, ruffled a few feathers at the regulator. No stone will be left unturned to expand the market share of the nation's already largest bank with nearly a fifth of the industry, when new licences for banks will be given away in the next few months.

"Growth will face challenges," Chaudhuri, who took charge as the chairman of SBI on Thursday, told reporters in his first media interaction . "There will be stresses like non-performing assets which will be one of our focus areas. We will look at NPAs that are appropriate for SBI. There has been an acceleration of NPAs, which we will try and bring down to market levels." SBI's gross bad loans are at 3.17% against an industry average of 2.5% as estimated by ratings firm Crisil . Its long-term loans that earn higher rates are about half of total.

Chaudhuri, unseen in public so far, will have two-and-a-half years at the corner office on the 18th floor at SBI Building in Mumbai to prove that he could match the charisma and abilities of Bhatt who was also admired for his plain speaking. Chaudhuri, a State banker since a year before the National Emergency in 1975 under Indira Gandhi, does not believe in protecting the turf with obstacles for new entrants. "We welcome more competition and participants in the banking business," said Chaudhuri.

"We are not in favour of entry barriers ." Teaser rates will continue under Chaudhuri, but after working out some compromise with the regulator.

Source: EconomicTimes