SBI not right candidate to take over more banks: Chairman
NEW DELHI: State Bank of India, the largest lender in the country with a market share of 23%, said further acquisition of public sector lenders would only lead to a monopoly, although chairman Rajnish Kumar agreed there was a need for consolidation.
“India needs to reduce the number of state-owned banks through consolidation for better management,” he said at an SBI function on Thursday.
SBI absorbed five associate lenders and the Bharatiya Mahila Bank in April 2017, bringing almost a quarter of the nation’s outstanding loans in the banking sector on to its books. The bank will wait until it can weigh the benefits from the mergers before considering additional acquisitions.
Finance minister Arun Jaitley will hold a quarterly review meeting with all state-run banks and it is expected that after the government announced a megamerger of three public sector banks earlier this week, other lenders will be nudged to look at options. The government proposed the merger of Bank of Baroda, Vijaya Bank and Dena Bank on Monday to create the country’s third-biggest lender.
The consolidation was proposed by a ministerial panel comprising chairperson Jaitley and cabinet ministers Piyush Goyal and Nirmala Sitharaman. The boards of the three banks will now consider the proposal.
“The government has suggested to the banks to consider these proposals and hopefully the boards will meet shortly and after adequate consultation, will take a decision,” Jaitley had said.
Kumar answered a query on stress in the power sector and said efforts were under way to resolve all cases. “Lenders are convinced about the IBC (Insolvency and Bankruptcy Code) process. There is no effort to consciously avoid IBC,” he said. Separately, banks and other stakeholders attended a meeting on Thursday called by Power Finance Corp to resolve issues of stressed assets in the sector.
“We hope to resolve 7-8 stressed power assets with an exposure of around Rs 17,000 crore during the breather given by the Supreme Court till November 11,” said Kumar. The Supreme Court has asked banks to maintain status quo and not to initiate insolvency proceedings against defaulting power companies till November 11, 2018, when it will hear the case again. During this period, lenders will be able to attempt resolution of stressed assets.
“On my radar, there are seven or eight projects. We are working only on that. If there is 100% consensus among lenders, only then it (resolution of stressed power assets) would happen,” Kumar said when asked whether SBI would be able to resolve any such cases by November 11.
“India needs to reduce the number of state-owned banks through consolidation for better management,” he said at an SBI function on Thursday.
SBI absorbed five associate lenders and the Bharatiya Mahila Bank in April 2017, bringing almost a quarter of the nation’s outstanding loans in the banking sector on to its books. The bank will wait until it can weigh the benefits from the mergers before considering additional acquisitions.
Finance minister Arun Jaitley will hold a quarterly review meeting with all state-run banks and it is expected that after the government announced a megamerger of three public sector banks earlier this week, other lenders will be nudged to look at options. The government proposed the merger of Bank of Baroda, Vijaya Bank and Dena Bank on Monday to create the country’s third-biggest lender.
The consolidation was proposed by a ministerial panel comprising chairperson Jaitley and cabinet ministers Piyush Goyal and Nirmala Sitharaman. The boards of the three banks will now consider the proposal.
“The government has suggested to the banks to consider these proposals and hopefully the boards will meet shortly and after adequate consultation, will take a decision,” Jaitley had said.
Kumar answered a query on stress in the power sector and said efforts were under way to resolve all cases. “Lenders are convinced about the IBC (Insolvency and Bankruptcy Code) process. There is no effort to consciously avoid IBC,” he said. Separately, banks and other stakeholders attended a meeting on Thursday called by Power Finance Corp to resolve issues of stressed assets in the sector.
“We hope to resolve 7-8 stressed power assets with an exposure of around Rs 17,000 crore during the breather given by the Supreme Court till November 11,” said Kumar. The Supreme Court has asked banks to maintain status quo and not to initiate insolvency proceedings against defaulting power companies till November 11, 2018, when it will hear the case again. During this period, lenders will be able to attempt resolution of stressed assets.
“On my radar, there are seven or eight projects. We are working only on that. If there is 100% consensus among lenders, only then it (resolution of stressed power assets) would happen,” Kumar said when asked whether SBI would be able to resolve any such cases by November 11.
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