Soon after taking over as the first woman chief of State Bank of India, chairperson Arundhati Bhattacharya, made it clear that the bank will keep its pursuit of cutting down non performing assets (NPAs) aggressively running.
Addressing her first press conference today after being appointed as the chief of the 207-year-old bank, Bhattacharya said, "We can't say that the war on NPA is over. We are going to make sure that the intensity is much, much more.. We will look to cut down the time span for resolving the processes."
Arundhati Bhattacharya.
The chairperson said that SBI will be increasingly using IT solutions to resolve the NPA crisis.
"I would say we will be using information technology (IT) much, much more…we have not leveraged IT much," Bhattacharya said in her first address to the press after assuming charge.
The first woman boss of the country's largest bank, however, warned that the bad loan problem could worsen before it improves.
Till the quarter ended June 30, the bank had accumulated bad loans worth Rs 60,891 crore, which translated to 5.56 per cent of the bank's total loans.
"(I am) Not worried about ROAs (return on assets) and ROEs (return on equities), it will improve with NPA containment," she said.
However, Bhattachrya pointed out that the immediate quarters will not show recovery as the economy continues to remain stressed. "We don't have a magic wand. In the next quarter results, there won't be much improvement on NPA," she said.
The new SBI chief said that the bank will grow selectively only in those corporates that are safe and a have growth potential.
Citing capital constraints, Bhattacharya, clarified that it will not be possible for SBI to merge any of its associate banks before March.
Bhattacharya said the idea is that the government will provide additional capital to the state-run banks and will expect the cost of capital being passed to the retail borrowers for purchase of consumer durables at cheaper rates.
When asked about reducing home loan rates, she said that the bank won't introduce new products, but it may reduce rates on existing products other than home loans, such as car loans etc.
Bhattacharya said that although the merger process with other banks will begin this year, it won't be over as the government has to take a call on capital flows.
