NPA woes: Banks on top of situation, returning to profit; says SBI Chairman

File photo of SBI Chairman Rajnish Kumar

Indian banks are now "on top of the situation" on the problem of the non-performing assets (NPA), State Bank of India Chairman Rajnish Kumar said.

Kumar said that going by the initial results that have started coming in September, it seems that many banks are returning to profit.

Elaborating further on the issue of NPAs, Kumar said last year the system was struggling with higher and elevated NPAs and largely it was the steel and power sectors that got impacted the most.

"The major challenge which the banks - public sector more and some of the private sector banks (in India) - they have been facing is the asset quality challenge. For the last three years, it has been going on but as of now we are now on top of the situation on the NPA problem," Kumar told PTI in an interview in New York.

"In the power sector, the banks have still not been able to resolve the issues. But the Insolvency and Bankruptcy Code has helped the banks and at least now there is a solution available," he said.

Kumar added that the Insolvency and Bankruptcy Code has come as a "very good tool" in the hands of the banks and the financial creditors.

On the value of the rupee, which had this month fell below the 74 level compared to the dollar, Kumar said, "If the oil prices are stabilised, the exchange will also stabilise. Domestic inflation is not as much a cause of worry because it is very much well within the target that the Reserve Bank of India has set."

He said domestically, the economy continues to do well but the oil prices are the "major culprit" because that impacts the country's current account deficit in a big way and it puts pressure on the exchange rate.


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel