State Bank of India (SBI) chairman Rajnish Kumar does not expect stress on assets to be as high as it has been projected. As a result, the opportunities for investors in stressed assets may not be as large as it has been made out to be. Kumar said this while speaking at a conference on opportunities for investment in stressed assets in India organised by industry body FICCI.
Rajnish Kumar said various estimates were going around on the amount of stress that could emerge in the aftermath of Covid-19. However, he said, “At SBI, I have a little contrarian view, and I do not want to disappoint potential investors.” Analysis of SBI’s loan book shows that the opportunity may not be as large as it has been made out to be. “And that would be a happy situation for country as well that opportunity remains small and not large,” he added.
FE had earlier reported that SBI expects 5% of its outstanding loans to come up for restructuring even though 72% of corporate loans in the system are under stress. The Reserve Bank of India (RBI) had earlier allowed restructuring of personal and corporate loans with strict boundaries.
Rajnish Kumar said there was complete clarity on restructuring of corporate loans due to recommendations of Kamath committee. The central bank had earlier accepted recommendations made by a committee under KV Kamath for restructuring of corporate loans. The central bank specified five key ratios across 26 sectors, which lenders must follow while restructuring of corporate accounts impacted by Covid-19. Kumar also said that SBI has set up category 1 real estate fund to look at the opportunities in the sector.
Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.