High bad debts temporary: SBI
Attributing rising bad debts to economic slowdown, State Bank of India (SBI) today said high Non-Performing Assets (NPAs) are 'temporary'.
"NPAs continue to be a challenge. But I don't want to put a number to it. I can only tell you that large part of the NPAs is really because of the external economy and I would think that they are temporary only," SBI Managing Director Diwakar Gupta told reporters on the sidelines of the Delhi Economics Conclave here.
SBI's NPAs rose to 5.15 per cent in the second quarter ended September, from 4.19 per cent over the year-ago period because of deteriorating asset quality.
He said the bank has made adequate provisioning norms.
"We have been providing in excess of the prudential provisions. Whatever Reserve Bank asked us to provide, we have been providing that, plus a little more." Gupta said.
The Reserve Bank recently increased the provisioning for standard restructured assets for banks to 2.75 per cent from 2 per cent.
Replying to a query on Kingfisher Airlines revival plans, the SBI managing director said there is no need to panic as long as there are assurances from the airline.
"Kingfisher has been a good airline at some point of time. They are going through their set of problems. And there is no reason for bankers to panic as long as they say that they are looking for a solution. The assurance only is that they are trying," he said.
SBI is the lead banker in the 17-lenders consortium that extended Rs 7,000 crore loans to
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