and that anybody else in position would have also reported the same set of numbers," Bhattacharya added.
The Reserve Bank, in its financial stability report released last week, flagged the Non Performing Assets issue and said the health of banks worsened in past six months.
"The strain on asset quality continues to be a major concern," the report said, adding that in a base case scenario - with the present conditions continuing - gross NPAs will rise to 4.6 per cent by September 2014 from 4.2 per cent in September 2013, and if economic conditions deteriorate, this will be 7 per cent by March 2015. The report also noted that the amount of recast loans touched an all-time high of 4 trillion or 10.2 per cent of the overall advances as of September 2013.
The state-run banks will be the worst-affected, the report said and pegged their gross NPAs at 4.9 per cent by March 2015, and that of new private sector banks at 2.7 per cent. If the restructured assets are added, the total stressed advances ratio rose to 10.2 per cent in September 2013 from the 9.2 per cent in March 2013, the RBI said.On pension provisions, the first-ever woman SBI chief said the issue of higher provisions arises from the change in mortality table by the insurers, which has gone up to 81 years from 76. "The bank has to provide for Rs 2,400 crore towards pensions, and we are doing Rs 600 crore each quarter. We have done two quarters and we will be doing two more quarters and then we will see how it is," Bhattacharya said. On the wage hike she said, no final settlement has been arrived at by the IBA.
For banks, Bhattacharya said, problems arise because of the mismatch in the funding patterns wherein banks fund long-term assets with short-to-mid-term money. At present 10-year deposits are funding assets with a lifespan of over 30 years and any hiccup in the project is bound to create problem for any bank, she said. "You are front-loading repayments. In case there is any diversion on execution or on the fact that growth assumptions are not correct, then you will see stress appearing in the system," she said.
"We need to strengthen the working of all the spokes in the ecosystem, like an improvement in takeout financing and corporate bond market to tide over the issue," she added. Bhattacharya