Mumbai: The State bank of India swung to profit from the year ago loss but fell short of profit. Rajnish Kumar, the chairman of State Bank of India says the loan of Essar Steel, Bhushan Power and Steel and Alok Industries a major setback for the Bank.
These three companies have taken a loan of 16,000 Crore from the State bank of India which has to give the write-back. Kumar intervene divine intervention for seeking help, says if these loans get cleared then the bank will move towards a good profit.
SBI has made 100% provisions against bad loans. The National Company Law Tribunal (NCLT) decides on cases under the Insolvency and Bankruptcy Code. Net profit for the June quarter at the state-owned lender was Rs 2,312 crore compared with a loss of Rs 4,876 crore in the year earlier. Profit fell short of the Rs 4,106 crore expectations due to widening losses in the corporate loan book while the treasury and retail segments performed well.
“Debt waiver issues emanating from just one state contributed around Rs 2,000 crore to the slippages,” Kumar said. The focus of the bank remains on fresh slippages to keep under control. While overall loans grew 12.47% to Rs 22.38 lakh crore, state-run corporations dominated, accounting for nearly 100% growth in sectors such as power, roads and ports. A large company classified as a Maharashtra by the government was also marked as a nonperforming asset (NPA) due to some technical issues, Kumar said.
