State Bank of Bikaner and Jaipur (SBBJ) is planning to sell Non-Performing Assets (NPAs) worth Rs 200 crore by March 31. “Our team is looking at selling NPAs. We may sell about Rs 200 crore, if we get a good price,” said Shiva Kumar, managing director, SBBJ.
For the quarter ended September 30, the gross NPA ratio of the bank declined to 3.29 per cent from 3.70 per cent a year ago. The net NPA ratio stood at 1.91 per cent, compared with 2.48 per cent at the end of September 30, 2011.
The bank is also looking at cutting deposit rates if the Reserve Bank of India (RBI) cuts the repo rate in the third-quarter review of the monetary policy later this month. “If there is a cut in repo rate, we will first reduce our deposit rates. We will cut across the tenures by at least 25 basis points,” said Kumar.
The street expects the RBI to cut the repo rate by at least 25 basis points on January 29.
The capital adequacy norms as specified under Basel-III regulations, which will be implemented from April 1, will result in banks shoring up their tier-I capital over the next five years. According to Kumar, SBBJ would require Rs 3,000 crore equity for the same purpose. Under Basel III regulations, tier-I comprises core equity capital. “Our capital adequacy ratio was 12.81 per cent last quarter out of which tier-I is above 9 per cent,” said Kumar. The equity capital will be by way of infusion from parent (State Bank of India) and rights issue.
For the nine months of the current fiscal, Kumar said the bank’s credit and deposit grew by over 10 per cent. “The last quarter is always better. So, we are expecting 17 per cent target for credit and 16.5 per cent for deposits to be achieved,” said Kumar.
According to Kumar, the next fiscal will be better in terms of credit growth. “Right now, demand from corporates is not much, and credit growth is subdued. But in another six months I do expect a turnaround. The GDP growth will also take a reversal. Our credit and deposit growth for the next fiscal will be 19-20 per cent,” said Kumar.
The industry awaits the RBI to issue the final guidelines on new banking licence. According to Kumar, with the entry of new banks in the private sector the industry will witness consolidations. “There is no merger proposal for SBBJ at present with SBI. But in due course it will happen, and associate bank merger is a natural fit,” he said.