Admitting that non-performing assets (NPAs) in the banking sector is a big challenge, SBI Managing Director S Viswanathan said the NPAs would start looking up once the economic situation gets better.
"Though the NPA stress will continue, it would start looking up in six months after the economic scenario improves," the managing director (associates and subsidiaries)
at SBI said at an event organised by XLRI here today.
"It will go up for sometime before it comes down," he said stating that NPAs would not cripple the prevailing banking system.
It is unfortunate to know that education loan contributed 20 per cent to total non-performing assets, he added.
Viswanathan said the country's largest lender has taken adequate steps to recover loans.
In the rural and semi-urban areas, we have enough pportunities to grow, he added.
Viswanathan also shared plans to reach out to people in remote areas lacking connectivity and accessibility. He said there is a need to bring more and more poor people in rural pockets under banking system by adopting new technologies and electronic means.
The banking sector has opportunities as well as challenges to address, he said while emphasising the need for financial inclusive.
Appreciating PSU banks' performances, he claimed that banking and insurance sectors were the only sectors where public sector firms continue to perform better than private players.
Viswanathan also spoke on proposals such as single demat account for all investments and credit cards for school students (above class 8th) to make them aware with the banking system.
Highlighting the growth of banking business since independence, he said the sector is currently valued at Rs 115 lakh crore and expected to more than double at Rs 288 lakh crore by 2020.
Viswanathan further said that about 70 per cent of business is being done by PSU banks, which were being accused of not providing the king services provided by the private banks.
He said the SBI group (SBI and its associates) holds 22 per cent of the market share in the country.