Unsecured loans not a worry for SBI, says Chairman Dinesh Khara

Around 86 percent of our unsecured book is to salaried customers, Khara said

The country's largest bank, the State Bank of India (SBI), does not see any worry in its unsecured book, said Chairman Dinesh Khara.

"We are not concerned about our unsecured book. Our unsecured book is better than our secured book. Around 86 percent of our unsecured book is to salaried customers," Khara said at the post-Q2FY24 quarterly results.

The Reserve Bank of India (RBI) Governor Shaktikanta Das in October 2023 monetary policy committee (MPC) flagged concerns over the recent surge in unsecured credit growth and asked banks and non-banking financial companies (NBFC) to strengthen their internal surveillance mechanisms.

"Banks and NBFCs would be well advised to strengthen their internal surveillance mechanisms, address the build-up of risks, if any, and institute suitable safeguards in their interest,” Das said.

Khara further said that the bank's gross-non-performing asset is at 0.69 percent.

"Till the end of September 30, 2023, our total unsecured book is at Rs 3.20 lakh crore," Khara said.

The bank on November 4 reported a net profit of Rs 14,330 crore for the July-September FY24 quarter marking an 8-percent jump from Rs 13,265 crore clocked a year ago. The country’s largest lender beat the market estimates of Rs 14,221 crore net profit for the quarter.

The net interest income (NII) stood at Rs 39,500 crore, which increased by 12.3 percent compared to Rs 31,184 crore reported in the corresponding quarter of the previous fiscal.

The bank's gross non-performing asset (NPA) stood at 2.55 percent down from 3.52 percent recorded in the same quarter last year. On the other hand, net NPA for the quarter stood at 0.64 percent improving from 0.80 percent on a year-on-year basis