After introducing fast track promotion for certain category of officers, we are considering giving more incentives to promote talents in the bank. We have to empower our staffers in the bank. This is very important for us and we want to transform our transaction managers into business managers along with high technology platform for the bank, AK Purwar, chairman and managing director, SBI, said. Mr Purwar said banking has become a highly competitive business and SBI is making efforts to bring down the transaction cost and improve the asset quality.
Today in a low interest scenario, good corporates are dictating their terms with us and we have understood very well that we have to give better rates to them, he pointed out. Commenting on the recent failure of the Hyderabad-based Global Trust Bank and its subsequent merger with Oriental Bank of Commerce (OBC), Mr Purwar said such occurrences are bound to happen in a competitive atmosphere in a market economy.
More and more such things will happen, said Mr Purwar, adding that the Reserve Bank India has played a key role in the whole affair. The weak and inefficient players will be moved out, he noted. On the recent proposed move by RBI to lay down new rules of ownership of the domestic private sector banks, Mr Purwar said that he will prefer to wait for the final guidelines.
According him, SBI may find it difficult to achieve its target of lowering the net non-performing assets (NPAs) to two per cent in 2004-05. The bank has targeted to have a net NPA level of two per cent but may be difficult to achieve the same in the current fiscal, said Mr Purwar.Mr Purwar said that the provisioning for the banks sticky assets will fall as the bank has almost provided for the NPAs within 90 days prudential guidelines.
In the first quarter ended June, net NPAs were slightly down at 3.45 per cent compared to 3.84 per cent in the first quarter of 2003-04. Mr Purwar said the net interest margin was also expected to grow as deposits get repriced, he said.