Home >Industry >Banking >No need to extend loan moratorium beyond August 31: SBI chairman Rajnish Kumar
SBI chairman Rajnish Kumar said, 'We are confident that six months is long enough for allowing non-repayment'
SBI chairman Rajnish Kumar said, 'We are confident that six months is long enough for allowing non-repayment'

No need to extend loan moratorium beyond August 31: SBI chairman Rajnish Kumar

  • India’s largest public sector lender State Bank of India (SBI) on Friday reported a net profit of 4,189.3 crore in the June quarter of FY21
  • HDFC chairman Deepak Parekh earlier requested Reserve Bank of India governor Shaktikanta Das not to extend the loan moratorium beyond August

The State Bank of India chairman Rajnish Kumar on Friday said there is no need to extend the moratorium on term loans beyond August. "Most bankers, including myself believe that there is no need for a moratorium beyond August 31," SBI chairman said. "We are confident that six months is long enough for allowing non-repayment," he added.

HDFC chairman Deepak Parekh earlier requested Reserve Bank of India governor Shaktikanta Das not to extend the loan moratorium beyond August. “Please do not extend the moratorium. We see that even people who have ability to pay whether corporate or individuals are taking advantage under this and deferring payment. We hear that there is some talk of extending the moratorium. It’s going to hurt and hurt smaller NBFCs," Parekh said.

Mint had earlier reported that RBI may allow banks to offer moratorium to stressed sectors such as aviation, hospitality etc. “While it’s a foregone conclusion that the moratorium will be extended for certain segments beyond August, the fine print is still a work in progress," said people with knowledge of the matter, according to a report in Mint.

State Bank of India, India's largest public sector lender, posted a 81% rise in year-on-year standalone net profit to 4,189.34 crore for quarter ended in June. The standalone total income increased to 74,457.86 crore in the first quarter of 2020-21 as against 70,653.23 crore in the same period a year ago.

Bank's gross non-performing assets (NPA) of the total advances declined to 5.44% during this quarter. SBI’s total deposits rose 16% y-o-y to 34.19 lakh crore and its total advances rose 7.6% y-o-y to 22.98 lakh crore.

The SBI chairman attributed this increase in deposits to a few things including removal of quarterly charges and mobile SMS charges. "I believe that we will garner higher deposits if we continue to provide an affordable banking service," Kumar added.

"The spread of COVID-L9 across the globe has resulted in decline in economic activity and increase in volatility in financial markets. ln this situation, though the challenges continue to unfold, the Bank is gearing itself on all fronts to meet the same. The situation continues to be uncertain and the Bank is evaluating the situation on an ongoing basis," India's largest bank said in a statement today.

"Major challenges for the Bank would arise from extended working capital cycle and waning cash flows. Despite these conditions, there would not be any significant impact on the liquidity and profitability of the Bank," the bank added.

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