Search the Internet          Tips  Sites: Finance, Investment

Credit off-take picking up since June, says SBI chief

Fakir Chand in Bangalore

State Bank of India chairman Janki Ballabh on Monday disclosed in Bangalore that the non-food credit off-take of banks had started picking up since June after a dip during the first two months of the current fiscal year.

"The onset of a good monsoon this season has revived the hopes a economic turn around. In June itself, we have seen some increase in bank credit, and it is going to gather momentum during the next few months," Ballabh stated on the sidelines of the launch of the bank's ATM network and Internet banking in Bangalore city.

According to the latest data from the Reserve Bank of India, the net non-food credit has gone up. The trend has reversed. Investment by the government in various infrastructure projects, which are at various stages of implementation, would also boost the economy and revive the growth rate, Ballabh affirmed.

Asked whether there was further scope for softening of interest rates for lending, the SBI chief said the current prime lending rate was sufficiently lower and he does not see any decrease in the interest rate in the near future.

"Interest rates are already at very a reasonable rate. I do not expect any hardening of it either. The current interest rate is likely to continue for more time. There is no need, per se, to lower them as there are so many other factors that were crucial to kick-start the economy, including spending on infrastructure projects by the government," Ballabh asserted.

On the issue of SBI extending a Rs 15-billion line of credit to UTI's US-64 scheme unit holders, Ballabh clarified that the bank had already such a loan offer against the security of the US-64 units or other units of UTI for individual holders.

"What we have said in the wake of the recent suspension of its sale and repurchase by the UTI was that the scheme was still available for taking loans up to 60 per cent of the face value as per the RBI stipulation, its net asset value notwithstanding," Ballabh said, adding that liquidity would be provided irrespective of the latest decision of the UTI to repurchase up to 3,000 units.

Allaying fears over the depreciation of rupee against dollar, Ballabh said there was no cause for concern over its current level as it was holding stronger than the basket of currencies in global forex markets.

"The robust level of forex reserves at $43 billion will take care of any fluctuation in the rupee-dollar rate. Even if there is a surge on imports, we have sufficient reserves to maintain its current level, thanks to the export sector doing well, resulting in stead inflow of dollars into the country," the chairman claimed.

Ballabh also informed the media that the bank would be finalising in the next couple of months the strategic foreign partner for picking up 50 per cent of SBI Caps equity.

"The discussions with various prospective partners are at an advance stage. We will let you know the moment we short-list them," he added, but declined to comment whether any premium had been worked out.

Money

Business News

Tell us what you think of this report