SBI chairman Dinesh Kumar Khara
Although corporates have started utilising their working capital limits on the back of a very clear trend for demand revival in the economy, any fresh investment demand from corporates is some time away, State Bank of India chairman Dinesh Kumar Khara said on Saturday.
“My sense is from the next financial year we (economy) will be nearer to the normal,” Khara said addressing the annual general meeting of The Bengal Chamber of Commerce and Industry here.
He said in October all the high-frequency indicators were portraying a very positive scenario. “I think partly it is also attributed to the fact that there is a lot of Covid fatigue. Everybody would like to get into the mainstream economic activity as soon as possible. That is also one of the reasons for the kind of enthusiasm seen in the economy. Earlier, we have felt that it is pent up demand, which is there from the consumers. But, I think now the way indicators are showing, there is a very clear trend for the demands,” the SBI chief said through video-conferencing.
On the credit offtake, he said SBI was almost back to its pre-Covid numbers as far as its retail lending was concerned, and almost a similar kind of a trend was seen across other banks also.
“But yes, corporate credit is invariably a function of capacity utilisation and also the kind of demand which is seen in the ground. Corporates perhaps have started utilising their working capital limits. When it comes to the investment demands, that, I think, is some time way.”
Capacity utilisation in the economy was somewhere around 69%, and expecting any fresh investment demand coming from the private corporates looked quite unlikely for some time to come, he pointed out.
According to him, cash rich public sector entities would probably embark upon their capital expenditure plan and probably generate the investment demands. “Now, we have started seeing some kind of enquiries for the brownfield capacity, which is awaiting resolutions in the NCLT. So, some kind of interest is seen from some of the corporates,” said Khara, who took charge as the new chairman of the country’s largest lender last month.
On lower restructurings under the the Reserve Bank of India’s new scheme, he said corporates were trying to exploit their own internal resources as restructuring would have an impact on their credit ratings.
“There is more responsible behaviour on the part of corporates…When people are coming for restructuring, they, first of all, are ensuring that if at all they have got ways to really go through in this kind of a tough situation,” Khara said.
On SBI’s agricultural slippages of around Rs 9,000 crore for the September quarter, Khara said it was partly on account of some restrictions on mobility imposed on the bank staff because of the Covid-related issues.
“In October, when we could have the sense of what kind of slippages have happened, and when we put our ground forces into the field, we have seen that we have actually pulled back over Rs 1000 crore,” Khara said.
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.
Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.
The post Fresh investment demand from corporates is some time away, says SBI Chairman Dinesh Kumar Khara appeared first on International News Headline 24X7.
from Indian News Websites https://ift.tt/2U4gKbT
via IFTTT
Post a Comment
Post a Comment