OP Bhatt, Chairman, State Bank of India, said the bank’s non-performing assets, or , in the agriculture sector have risen significantly in the past year. "There are pockets in the country where there are large overdues in tractor loans. However, there is no slowdown in agricultural loans. SBI has financed 42 lakh new farmers between April 2004 to March 2008. Agricultural advances in the above period stood at Rs 70,000 crore."
SBI has 7,000 branches in rural and semi-urban areas, he said. "The number is set to rise to10,000 branches. 1,000 new branches will be opened in rural and semi-urban centers this year."
By
It seems to be like a public relations exercise after yesterday’s really tough circular that the bank gave to its employees yesterday. It stated that because of 17% delinquencies in its tractor loans portfolio, it was going to put a temporary stay on giving fresh loans for tractors and not for entire farm loans.
Today’s note from its Chairman OP Bhatt, who is not in the country, seems like a PR exercise and no one is confirming this from the bank. But we understand that they may have got some sort of an indication from the Finance Ministry to put out a clarification, however no SBI official is confirming this. Today’s note says that SBI will grow its agricultural advances by another Rs 13,400 crore, or 33%. It will also put in 3,000 branches in rural and semi-urban areas. So, the agricultural thrust will continue for SBI.
This is a dilemma which is faced by other banks as well. Should they continue lending where NPAs are rising slightly and on the other hand also try to please the government the larger shareholder.
Offline
Watch Video
-29.60 -2.00%
