Gandhinagar : With non-performing assets from large corporates at worryingly high levels, State Bank of India Chairperson Arundhati Bhattacharya said lenders should be innovative in tailoring their products.
“There are lots of hybrid instruments that can be looked at. There are ways of structuring loans so that we capture the cash-flow as it comes, rather than give a repayment schedule that is unrealistic and which cannot be met,” Bhattacharya said, addressing a seminar at the Vibrant Gujarat Summit.
The chief of the nation’s largest bank said domestic banks practise “vanilla banking”, which entails accepting deposits and lending the same as loans, but now there is a need to be more innovative.
“Banks need to be more responsive to needs of borrowers rather than sell standard set of products,” she said. Bhattacharya’s comments come at a time when the gross NPAs have reached 4.5 per cent of total advances as of the September quarter, from 4.1 per cent in March 2014, according to RBI. When the restructured assets are added, the ratio of stressed advances shoots up to 10.7 per cent from 10 per cent in March.
