Wednesday, February 06, 2019

Jet Airways's debt is our first a/c under Project Sashakt: Rajnish Kumar

Rajnish Kumar, chairman, State Bank of India (SBI), spoke about the third quarter results, non-performing asset levels of the bank and 'Project Sashakt' in an interview with Anurag Shah of Zee Business. Edited Excerpts:

SBI has posted good results in Q3. What were the growth drivers, and what would be the bank's credit growth in the next quarter?
The bank's credit growth stands at around 16% as far as the domestic book is concerned and I feel that we will be able to maintain it. However, certain decline, in percentage terms, can be seen in March 2019 as in March 2018 we had reported a good (single month) growth, but we have grown throughout the year this fiscal. Our credit growth will go as per our projected target of 10-12%. In fact, we will grow by 12%. This growth will be backed by certain factors such as improved margins (net-interest margin) and control on slippages. Another thing to notice is provisioning, which has been accelerated without taking it into profits. This step has helped the bank to improve its provision coverage ratio. In addition, the NPAs are now below 4%, and this trend will continue in the future as further recoveries are visible to us.

Could you share the number of NCLT cases that will be solved by March?
There are eight accounts, of which five are lying in NCLT 1 and 2. The remaining three belong to the power sector. Resolution of these accounts will help the bank to reduce its gross NPA levels by Rs 34,000 crore and Rs 6,000 crore, and can have a positive impact on the bank's profit and loss. If everything goes well and different accounts lying with different authorities and regulatory commissions of different states are solved within the next two months, it can help the bank in improving its gross and net NPA picture.

Are you hopeful about the conversion of Jet Airways's debt into equity, which is going to be your first case under 'Project Sashakt'?
Yes, Jet Airways is going to be the first case. Resolution plans on other projects are in process and we will tie up on several things. However, processes laid down under 'Project Sashakt' such as an independent screening committee will also examine the resolution plan. In addition, the plans will be designed by keeping different guidelines in mind such as RBI's February 12 guidelines, Sebi guidelines as well as those issued by the civil aviation ministry and Department of Industrial Policy and Promotion.
06/02/19 Anurag Shah/DNA