The company which is also a lender to the debt-laden and grounded Kingfisher Airlines is exploring all options to recover dues, Kamath said.
" SBI is acting on behalf of all the lenders there. It is a collective decision. We are all looking at recovering our dues wherever it is possible to enforce securities and recover our dues now," he added.
Also read: Bombay High Court allows SBI to sell USL shares
The bank decreased its deposit rates, following a 25 bps cut in repo rate by Reserve Bank of India on April 1. Deposit rate cut will help the bank to improve cost of funds, which is likely to result in better net interest margins.
"It is only one month we tried to see that when there was pressure building, to pass on the benefit to the retail vendors and retail depositors. Now that the liquidity pressure is not that much and we are positive in liquidity, we have rolled back the increases we did earlier, Kamath said.
Below is the verbatim transcript of the interview
Q: What is the asset quality picture looking like this quarter after the improvement that you have clocked in Q3?
A: We expect to maintain whatever we did in the last quarter. The numbers are yet to come. I have limitations in talking on these numbers now.
Q: Is the recovery picture improving?
A: Yes, the recovery picture is improving.
Q: Have you seen any pick up in loan growth at all over the last few months or does it continue to be very sluggish?
A: We have adopted a strategy, which we did declare during last quarter results. We had decided to shed a lot of bulk deposits. Our bulk deposits have come down by about Rs 40,000 crore in the last six months. So to that extent there has been an adjustment what we did in the asset side also. Keeping together, our asset growth has been very marginal.
Q: Has there been any kind of diminishing of the restructured loan portfolio?
A: I would say that it would not have been as much as in the previous quarters, but the pressure is still there.
Q: From which sectors?
A: The iron and steel is under some pressure. Power and mining are also there. Some of these sectors are under pressure.
Q: Last couple of days we have seen quite a bit of assertive action from your peer State Bank of India (SBI) with one of its key accounts on selling stock and recovering some of its dues. Is Punjab National Bank (PNB) also ready to adopt such strategies?
A: We are all there. SBI is acting on behalf of all the lenders there. It is a collective decision. We are all looking at recovering our dues, wherever it is possible to enforce securities and recover our dues now.
Q: Does that include continued selling of pledged shares?
A: Yes, whatever is recoverable. The question is that wherever we can recover our money, we will definitely try to recover.
Q: Has there been a sea change in the way public sector banks like you approach some of these troubled accounts now? We have not seen this kind of aggression in the past by selling down stock to recover money which seems to be lost?
A: The public sector banks are first always trying to support the promoters or support the borrowers. The first effort has been to see that if you can support an industry or an activity and revive it, rehabilitate it and that has been the first effort by the public sector banks. When these things are not yielding results, then we need to think of recovering our money.
Q: So you have been patient but your patience was not very rewarding?
A: Yes, you always give sufficient time to the people to comeback to business, resurrect it. If it does not happen, we need to somewhere start acting.
Q: Has there been any change in deposit rates recently? What kind of implications could it have on your Net Interest Margins (NIM)?
A: There are always two types of rates, one is less than Rs 1 crore and one is above Rs 1 crore. Above Rs 1 crore is normally determined by the market where the liquidity positions put pressure. Our effort has always been to see that. We try to align the rate of interest which is below Rs 1 crore to somewhere near to above Rs 1 crore, so that the retail depositor also gets this benefit. In the month of March the short-term deposits were under pressure, rates of interest were increasing in the wholesale market, so we tried to align the retail rates to the wholesale rates and increased our rates, between 1 percent to 2 percent in less than one year. So after that pressure is seen off, now we have reversed that from 1st of April. So it is only one month we tried to see that when there was pressure building to pass on the benefit to the retail vendors and retail depositors. Now that the liquidity pressure is not that much and we are positive in liquidity, we have rolled back the increases what we did.
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