SBI’s Chairman Rajnish Kumar has said that recapitalisation of banks should not be done piecemeal. (Image: ANI)
Days after Finance Minister Arun Jaitley expressed concern about the ailing banking sector in India, saying rebuilding capacity of banks is government’s top agenda, SBI’s Chairman Rajnish Kumar has said that recapitalisation of banks should not be done piecemeal. In an interview with ET Now, the newly appointed Chairman of India’s largest bank said, “Recapitalisation is the need of the hour…. Recapitalisation bonds is one way to do that (but) it should not be done piecemeal, it should come in one go; it should come with a business plan for all the banks.”
Last week, during his week-long visit to the United States, Finance Minister Arun Jaitley said the Indian government is working on a plan to rebuild the capacity of the banking sector so that it could support growth. “We need to rebuild the capacity (of the banking sector),” Jaitley had said at Harvard University in Boston.
Speaking about the bad loans problem, Rajnish Kumar said that non-performing assets (NAPs) is the one area which is “impacting” the public sector banks, and that it needs to be addressed in a planned manner. The SBI Chairman said that credit growth and asset resolution both were in bank’s top agenda. “We have to address the internal organisation structure. We have made one managing director responsible for stressed asset resolution; others can focus on credit growth,” Rajnish Kumar told ET Now.
On being asked where the money is going to come for the recapitalisation of banks, Rajnish Kumar said, “You had recapitalisation bonds for the banks in 1995, and that was a 20,000 crore programme. In terms of time-value money even 100, 000 crore would not look much.” The SBI chairman also said the bank will also try to consolidate some of its debt.He said that the growth, in terms of percentage, looks a bit lower, but in terms of retail, it seems intact.
The SBI chairman also said the bank will also try to consolidate some of its debt.He said that the growth, in terms of percentage, looks a bit lower, but in terms of retail, it seems intact.
Rajnish Kumar earlier this month was appointed as the new Chairman of the State Bank of India for three years replacing Arundhati Bhattacharya. He was the Managing Director of the bank before taking the charge.
