State Bank of India has pitched for further rate cut by the Reserve Bank to ‘pump up domestic demand’ as inflation is low.
“With ebbing inflationary pressures there may be further scope for monetary stimulus to pump up domestic demand,” SBI Chairperson Arundhati Bhattacharya said.
RBI, in June 2 monetary policy review, cut the repo rate (short-term lending rate) from 7.5 per cent to 7.25, but left all other policy tools like cash reserve requirement unchanged at 4 per cent and Statutory Liquidity Ratio at 21.5 per cent.
It had left the key rate unchanged in the April policy fearing rising inflation.
India is poised to recover moderately with industrial production gaining momentum, Bhattacharya said in a message to shareholders.
“Interestingly, the risk of deficit monsoon seems to be dissipating with more than adequate rainfall in June 2015,” she said.
“Looking ahead, boost to exports in the backdrop of global economic recovery and improvement in domestic investment climate, backed by various initiatives of the government, supports favourable growth outlook,” she added.
She said SBI is taking steps to clamp down on bad loans that include web-based tracking of assets and “regular calls” to stressed accounts in retail as well as real estate segments.
In addition, the bank has initiated ‘Dynamic Credit Rating’ review of borrowal accounts to capture deterioration in credit quality promptly and to initiate corrective action and facilitate correct pricing of risk.
“During the year (2014-15), the bank has embarked on a number of initiatives to clamp down on NPAs. Some of them are web-based Assets Tracking & Monitoring and regular calls to stressed accounts (SMAs) in Retail segment and Real Estate sector to prevent slippages…,” she said.
The bank’s exposure in retail segment, which includes housing, auto, education and personal loans, increased to Rs. 2.72 lakh crore, from Rs. 2.37 lakh crore at the end of March 2014.
Of the gross NPAs, retail was Rs. 2,528 crore at the end of March 2015. It has come down from Rs. 3,034 crore at the end of 2013-14.