In the case of non-performing assets (NPAs), most banks will be in good standing by March. This claim has been made by State Bank of India (SBI) chairman Rajnish Kumar. He told that in the banking system there is no shortage of cash for debt distribution. He said that there has been no significant reduction in the demand for credit in the infrastructure and consumer sectors. In such a situation, loan distribution opportunities are available in these areas.
When asked about the benefits of reducing the repo rate by the Reserve Bank, consumers are not able to reach it, Rajnish Kumar said that banks cannot cut the interest rate by more than a limit given the risk of imbalance in assets and liabilities. Let us tell that the RBI has cut the repo rate five times in a row this year but banks have not given the benefit according to the expectation. This is the reason that there is no change in the repo rate in the December monetary review meeting. On this decision, the RBI governor said that at present it is necessary to benefit the customers of earlier cuts.
According to SBI Chairman Rajnish Kumar, there is no shortage of capital in the banking system. He claimed that corporates are not taking adequate loans and are not utilizing their potential well. Regarding lending to telecom companies for the proposed auction of spectrum, he said, "It is completely unsafe for us to give loans to telecom companies for auction of spectrum. It is safe on paper because the auction is going to be done by the government, but in practice it is completely unsafe. "
According to Rajnish Kumar, in such circumstances banks will have to evaluate carefully before lending to the telecom sector, because there is a high probability of default in repayment of loan installments.
