SBI sees scope for cut in rates on some loan productshttps://indianexpress.com/article/news-archive/web/sbi-sees-scope-for-cut-in-rates-on-some-loan-products/

SBI sees scope for cut in rates on some loan products

The new SBI chairperson said the bank will focus on using IT on a bigger scale to improve the performance.

State Bank of India (SBI) on Tuesday said there’s scope for a reduction in interest rates on auto and other loan products but ruled out a cut in home loan rates.

“We’re trying to reduce some rates. There’s no scope to reduce home loan rates. The government was looking at whether loans were available for purchase of consumer goods and durables in the festival seaon. To that extent,the government says we will give certain amount of capital and the banks can leverage that capital and pass it on,” new SBI chairperson Arundhati Bhattacharya said while addressing her first press conference after taking charge. “We always have some scheme during the festival season. This is not a directed credit and there’s no target to be achieved,” she said. SBI is now waiting for the final word from the government before taking a decision.

On the RBI’s decision to slash marginal lending facility (MSF) rate,Bhattacharya said,“when the RBI increased MSF rates by 300 basis points in mid-July,we did not increase the rate and we absorbed the costs. Now the MSF rate is coming down. So there’s no question of bringing down the interest rate. We don’t go for wholesale borrowing. We go for retail borrowing.”

However,she refused to give any financial projections as the audit for the September quarter was going on and the bank management has to follow the “silent period” ahead of the quarterly results announcement later this month.

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She said intensifying the efforts to recover money stuck in non-performing assets (NPAs) and use of more information technology (IT) to improve the performance will be her priorities in the coming months. “The war against NPAs is far from over. We will intensify our efforts to recover NPAs. We will use a lot of other tools for the recovery. There’s no magic wand with any of us. The bank will have to take measured steps in a sustained manner,” Bhattacharya said. Gross non-performing assets (NPAs) rose sharply to 5.56 per cent of advances at Rs 60,891 crore during the June quarter as against Rs 47,156 crore (4.99 per cent) in the same quarter of last year. As a result,net profit fell to Rs 3,241 crore in June quarter from Rs 3,752 crore a year earlier.

The new SBI chairperson said the bank will focus on using IT on a bigger scale to improve the performance.