"Even when I joined I had said that I do not see anything (improvement in asset quality) before three quarters and I continue to maintain that. I don't think you can see a turnaround that fast," State Bank of India chairperson Arundhati Bhattacharya told PTI in an interview.
Replying to questions on bad assets, she said some improvement may be seen after the forthcoming general elections but any concrete signals can come only towards the end of 2014.
"You would see the stress lessening when you see GDP growth going up. Till such a time, the stress is going to be there," she said, adding that revival of stressed projects is essential for the economy to revive.
Bhattacharya said she hopes that clearances granted by the Cabinet Committee on Investment (CCI) will result in some loan demand by March, as state-level approvals are likely to be secured by the companies over the course of this quarter.
CCI, since last June, has cleared 128 large projects worth over R4 lakh crore, while over 200 more projects involving more than R14 lakh crore are still stuck for want of various approvals.
Hence, the tepid loan demand from corporates even in the current busy credit season. Till mid-December credit growth was a poor 14.7%, according to RBI data.
Bhattacharya said the dip in profits and a surge in stressed assets was not due to a "clean up". The bad loan numbers represent a true picture of things at the bank and no "clean-up" has been done by her, she said. "Absolutely no extraordinary cleaning has been done... The economy is bad, we are doing a lot of provisions on pensions and wage revisions. That is how the numbers were impacted. It has nothing to do with my coming in and that anybody else in position would have also reported the same set of numbers," Bhattacharya added.