This means that close to a quarter of SBI’s loan book came under moratorium in the very first month.

State Bank of India (SBI) had loans worth Rs 5.64 lakh crore, or 23.3% of its loan book, under moratorium as on March 31, the bank has disclosed this in its annual report for FY20.

While the country’s largest bank had earlier said it had set aside Rs 6,250 crore as provisions against accounts under moratorium, this is its first disclosure on the value of loans which have been granted the standstill.

The repayment moratorium was first announced by the Reserve Bank of India (RBI) on March 27 for the months of March-May and later extended by another three months up to August. This means that close to a quarter of SBI’s loan book came under moratorium in the very first month.

In a post-results call with analysts, SBI chairman Rajnish Kumar admitted that slippages could rise in the June quarter as a result of the moratorium. “Now, if things turn out to be like it was then what it is then we have still sufficient cushion in our earnings and we are looking at that what happens in the next three quarters you are not talking about what happens in June. In June there will be fresh slippages because of moratorium,” the call transcript quoted Kumar as saying. He also said as of May end, 18% of the bank’s portfolio was under moratorium.

The decline in SBI’s moratorium book is in line with the overall trend in the banking system of fewer borrowers extending their moratorium into the second phase.

A Macquarie report dated June 17 said the unanimous feedback from the bank managements has been that there has been a decline in the total loan book under moratorium from the 25–30% numbers reported in May end. It is still early days though, the report cautioned. “Bank managements were cautious in extrapolating the decline, as it has been only as of June 15, and customers have time until end-August to opt for moratorium.”

The quantum of loans under moratorium is important as it holds clues to the banking system’s asset quality situation after August 31.

In a note to its clients earlier this month, Jefferies pitted the current scenario against that seen in the aftermath of the global financial crisis when RBI had allowed a special restructuring during 2008-13. Then, SBI had seen about 3% of loans being restructured and over the next three-four years, nearly 30-35% of these loans (1% of total loans) slipped. “However, such high extent of slippage may not happen now as (1) many borrowers have taken moratorium purely for cash conservation and (2) share of retail loans is much higher now vs. 2009,” analysts at Jefferies added.