The NPAs continue to mount, not just in the real estate sector, but in other sectors as well, like commercial estate, small and medium enterprises (SMEs) and, we need to manage the risks without affecting the growth, he added. In percentage terms the gross and net NPAs might be decreasing but in absolute terms they are rising, he explained.
SBIs net NPAs in home loans currently stands in the range of 3-4%, which has increased by 50 basis points than earlier, said Bhatt without specifying the time period. Deregulation has hurt the public sector banks the most, he justified.
High interest rates, inflation that refuses to moderate and infrastructure bottlenecks mean bad loans could spill over to other sectors of the economy, he added.
At the moment there is no cause for concern, but there is definitely a cause to think, plan and act. Whenever economic cycles turn one way or the other, there may be a lag effect ... there can be consequences, he said. It is prudent to take action.
The countrys largest bank has targeted loan growth of 25% in FY2008, compared to about 28% the previous year and a deposit growth of 20-22% in FY08 from 16-17% during FY07, Bhatt mentioned.
At this point of time there is no cause for concern, but there is definitely a cause to think, plan and act,he concluded.