SBI’s New Chairman: Retail Credit is Seeing a Decent Pick-Up

State Bank of India’s (SBI’s) Chairman Dinesh Khara here on Wednesday stated that the scope of the revival of corporate credit demand low and most of the corporates are approaching the debt capital market instead.

SBI

SBI’s new chairman has brought several important points to our attention. 

Mr Dinesh Khara was appointed as the new chairman of State Bank of India (SBI) for three years effective from October 07, 2020. In his first interaction as the new chairman of the largest bank, he mentioned that there is an improvement in retail credit demand even during the economic slowdown.

In his statement, further mentioning that the retail credit engine is going well, he said that on the corporate side, the banks would have to be mindful of the fact that many companies are not going to the credit market. Still, they are now aligned towards the debt capital market said, Mr Khara.

According to Mr Khara, even after adding the Non-SLR (Statutory Liquidity Ratio) growth, the overall credit growth would only be 10%. The lending organisations will have to cater to the requirements, whether through credit or the investment market.

He also highlighted his top priorities for the next three years, which includes the safety of employees, customers, and maintaining the bank’s asset quality.

Like the former SBI Chairman, Mr Khara felt that there is little demand in the restructuring of the loan to beat the COVID stress. However, he did not make any comments on the government’s recent scheme to waive interest-on-interest (compound interest) on loan moratorium.

There is a website that facilitates people to make an enquiry on loan restructuring where they note the behaviour and also the number of people interest in this process.

According to Mr Khara, request for corporate restructuring is relatively low, and not many have approached the lending organisations for the same. On the other hand, he also emphasised on the fact that looking at the number of people who have applied for restructuring is manageable and not unusual.

In the end, Mr Khara added that the lenders are using the “wait-and-watch” technique where they wait and analyse the growth and make the call for capital raising depending on the credit pickup.

Read: SBI and Hindustan Unilever join hands to enable credit access to small retailers.

 

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