But ‘advances to MSMEs and agriculture have done very well’
The State Bank of Bikaner and Jaipur (SBBJ) reported a total business of over ₹1,48,000 crore for the first nine months of this fiscal. Total deposits during the period (April-December) stood at over ₹81,000 crore and advances at around ₹67,000 crore. Recently in Kolkata to inaugurate a new branch, Jyoti Ghosh, Managing Director of SBBJ, spoke about expansion plans, targeting the Hindi belt, capital raising plans and non-performing assets. Edited excerpts:
What is SBBJ’s expansion plan with regard to branch network?
This year we opened 117 new branches. Of these, 60-65 branches are in Rajasthan. We are not going to expand further this year, because if we open branches at the end of the year, they will not be profitable. And it has been a conscious effort from our end to not have loss-making branches.
The idea now is to expand to the Hindi belt because of commonality of language and saturation in Rajasthan.
So, which would be the new States you target?
Since most of our probationary officers hail from Jharkhand, Bihar, Odisha, West Bengal, Chhattisgarh and Madhya Pradesh, we are targeting these States. Definitely Chhattisgarh, where we do not have any presence at the moment. We intend to go to the North-East too, maybe Guwahati, Shillong and Manipur. And, to the South if we have good opportunities.
What has the year been like so far?
Large advances have been muted, because of the economy and infrastructure bottlenecks. Both our deposits and advances in the P-segment, and advances to MSMEs and agriculture have done very well. While focus will be on retail, we hope that large advances will happen around March.
How has the Pradhan Mantri Jan Dhan Yojana panned out for SBBJ?
We targeted 20 lakh accounts. Currently, we have upwards of 18 lakh account holders under Jan Dhan with a deposit of around ₹250 crore. In some accounts, transactions will take place once the direct benefit transfer schemes take off.
How do you see the NPA movement?
Stress is definitely there for all public sector banks. In September, our Gross NPAs stood at 4.24 per cent (net NPAs, at 2.49). Our restructured assets pipeline stands at around 7.5 per cent of our total advances.
When do you expect the NPA scenario to improve?
Stress will always be there. Out of 100 accounts five-odd will always be stressed. Stress in retail sector is temporary. In the large accounts, we hope to see movement April onwards, post the Government initiatives taking shape.
We hope some of the accounts that have turned non-performing or gone for corporate debt restructuring will come out of it over the next one-three years.
Are you worried about an economic slowdown again, especially with falling oil prices and failure of recovery in the global economy?
I don’t see a slowdown in the fast-moving consumer goods segment in India with 80-85 per cent of people being employed in government and quasi-government organisations. Domestic demand should be in place aiding economic recovery. Already green-shoots are being seen abroad. And it is a matter of time before the foreign sector starts moving too.
What about your exposure to Bhushan Steel?
Our exposure is around ₹400 crore. But it is not a bad asset, it’s stressed.
Any fund-raising plans?
Yes. We are looking to raise Tier-II capital of around ₹250 crore through bonds before March 31.
The (issue) process is yet to be finalised. The funds would be used to take care of our risk-weighted assets. As advances rise, we expect our risk-weighted assets to move up too. The better capital position will help us cushion it.
Will wage negotiations impact bottomlines?
I do not expect much of a hit, because some 15 per cent provisioning has been done by all the banks.
Recently, banks have been allowed to sell multiple company insurance products. What are your plans?
We market SBI Life’s products. But, currently, we have not taken a call on acting as insurance brokers.