STALLED 201113 PROJECTS LED TO NPA PROBLEM: BHATTACHARYA

The current stress in the Indian banking sector is due to stalled projects between 20112013, and efforts are being made to ensure the “de-bottlenecking” of these projects, SBI chairman Arundhati Bhattacharya said.

“The banking sector (in India) faces some amount of stress at this point of time mainly because of the kind of stalling of projects that we saw happen between 2011-2013. We are trying our level best to ensure the de-bottlenecking of all of these projects that got stalled. Some amount of that has been done and a lot still needs to be done.”

There is “obviously” an issue in respect of more and more capital requirement for the banking sector itself and “we are working on various means to ensure that the banking sector itself is strengthened,” she added

Pointing out that inflation is “quite well-contained” and India should be well within the “glide path” set by the Reserve Bank of India for consumer price index inflation to be 5% or less by January 2017, the SBI chairman said : “We think we will get there... the recent uptick in CPI was mainly due to vegetable and pulses and the core CPI is actually showing a constant downtrend.”

Interest rates are also coming off from their historical highs and though they are “quite low currently, it may be not low enough to really kickstart a lot of investment,” she said.