SBI: Only Rs 2L cr corp loans may be recast


Mumbai: State Bank of India (SBI) chairman Rajnish Kumar has said he does not expect the value of bank loans to corporates that come up for restructuring to exceed Rs 2 lakh crore. While rating agencies have forecast that loans of nearly Rs 8 lakh crore may need to be restructured, the chief of the country’s largest bank said that SBI’s experience led him to forecast a more modest number for the industry.
“In the last 21 days (since the moratorium ended) we have not seen any clamour for restructuring. Large corporates have cleaned up their books and de-leveraged. There are a couple of large accounts under stress, but these are seeing a change in management. We expect most of the requests to come from small corporates and MSMEs,” said Kumar. He was speaking at an online banking colloquium organised by Brickwork Ratings.
According to Kumar, of the worst affected industries, airlines had a different debt profile with most of their borrowing being in the form of aircraft leasing. “The term loans will need to be restructured. Similarly, shopping malls also will need restructuring of term loans,” said Kumar.
Banks have a loan book of over Rs 100 lakh crore. According to rating agencies, total corporate debt is estimated at around Rs 65 lakh crore. India Ratings had forecast that banks may restructure Rs 8.4 lakh crore worth of loans.
Kumar said that for retail loans, the bank had launched a portal for checking eligibility. “Within a week, we will make this an end-to-end process and the customer will only have to submit a signed letter to the branch,” he said. Explaining his rationale for optimism, Kumar said that output was getting close to pre-Covid levels. But if the pandemic situation got prolonged, the stress could appear in FY22, he said.
Speaking at the same event, Indian Overseas Bank MD & CEO Partha Pratim Sengupta said that most of the projects were being made assuming businesses return to normalcy in two years, based on the progress made on the vaccine front and the declining case fatality rate numbers due to Covid-19. “Thinking along these lines, the projections for the next year can be deferred by two years. It is important for banks and borrowers that they do not come out with rosy projections,” he said.

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