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Home / News / India /  Retail credit seeing pickup; corporates are tapping debt capital market: SBI's new chairman

MUMBAI : State Bank of India’s new chairman Dinesh Khara on Wednesday said that there is no revival in sight for corporate credit demand and that most corporates are now tapping the debt capital market instead. In his first interaction with the media after taking charge as the chairman of the country’s largest bank, Khara however said that credit demand is sanguine with retail credit seeing a decent pick up.

“Our retail credit engine is doing quite well. On the corporate side, we have to be mindful of the fact that many cos are not going to the credit market but to the debt capital market," said Khara.

“If we add up our growth in non SLR portfolio, the (credit) growth would be about 10%. Perhaps, we will have to re-adjust to new reality and corporate desire. We will have to meet their requirements whether through credit or the investment market," he said.

Khara also enumerated his top priorities for the next three years as safety of employees, customers and maintaining the bank’s asset quality.

Like his predecessor Rajnish Kumar, Khara reiterated that there is little demand for restructuring of loans as permitted by RBI to beat the Covid stress. While he did not comment on the government’s recent move to waive compound interest on the loans during the moratorium period, he said that the restructuring of accounts will be within manageable limits.

“We are very closely observing the behaviour of people who are showing interest in restructuring. We have created a website (for retail recast), allowing people to come for enquiries. When we look at the hits, that itself is a reflection of people looking at restructuring. I would say that whatever numbers we have seen till now and considering our book, I think it is very much manageable. When it comes to corporate restructuring, I think as of now we have not seen many corporates reaching out (to us). There are some. Whatever numbers we have seen, it is nothing very unusual. I would say that it is all within the manageable limits," he said.

On the bank’s capital raising plan, Khara said that the bank is currently on wait and watch mode and will take a call on capital raising depending on the credit pick up.

“We have options in tier-I, tier-II (bonds) apart from equity. We have raised the money through tier-I and tier-II and our capital adequacy position is very comfortable. The kind of credit growth we are seeing, we are quite comfortably placed as of now. We would like to reach out to the capital market for incremental capital raising as and when we get to see the traction for the building up of assets. Maybe, I think for that we have to wait and watch for some more time," he added.

Khara said that the bank will continue to strengthen the digital and analytical capabilities to serve its customers.

The bank is also looking to hive off its digital platform You Only need One (Yono) app into a separate subsidiary. However he did not divulge too many details about the plans to monetize YONO

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