SBI<\/a> Chairman Rajnish Kumar said.<\/p>\nThe time taken for resolution of bad loans is also likely to reduce going ahead with stronger resolution mechanism, he said.\u00a0\u00a0\u201cThese two quarters (Q3 and Q4) will be very good quarters. The recoveries will be at peak because large assets would have been resolved by March or latest by June,\u201d Kumar said at a credit conclave organised by Edelweiss.<\/p>\n
He said the waiting period for resolution of stressed assets,\u00a0 which used to be 5 years plus, has come down, and will reduce further.\u00a0Referring to credit growth, he said SBI\u2019s\u00a0year-to-date credit growth was negative for the first six months of the current fiscal but improved between October to December.<\/p>\n
\u201cOur year-on-year credit growth has come down to 5 per cent for domestic market and for international market, it has slowed to 7 per cent,\u201d he said.\u00a0 According to Kumar, credit growth is going to be muted for some time and the sector may not witness the double-digit growth which it has seen in the past.\u00a0 \u201cIf you are thinking that things will be back to what they were earlier, that I don\u2019t think is going to (happen) ,\u201d he said.<\/p>\n
In the fortnight ended December 20, 2019, banks credit and deposits grew 7.10 per cent and 10.09 per cent to Rs 99.47 lakh crore and Rs 130.08 lakh crore, according to the latest Reserve Bank data. He said\u00a0banks have become more cautious while lending.<\/p>\n
\u201cThere is not going to be any dilution in scrutiny or monitoring\u00a0by banks,\u201d Kumar said adding there will be no dearth of funding to deserving borrowers.\u00a0Banks are seeing demand from credit\u00a0project pipeline from three sectors \u2013 oil and gas, solar and road.
\u201cHowever, there is no large ticket demand for credit which we have seen last year,\u201d he added.
According to Kumar, bond market can become liquid only when there are enough number of buyers.
Commenting on the National Statistical Office (NSO) GDP\u00a0 forecast, he said the numbers are lower than expectations.<\/p>\n
According to NSO data released Tuesday, India\u2019s GDP growth is seen dipping to an 11-year low of 5 per cent in the current fiscal, mainly due to poor showing by manufacturing and construction sectors.
He said the US-Iran situation can put upward pressure on commodity prices and can impact the country\u2019s current account deficit (CAD) and forex rates.<\/p>\n
The CAD in the first half the this fiscal narrowed to 1.5 per cent of GDP from 2.6 per cent in the same period of 2018-19, on the back of a reduction in the trade deficit, which shrank to USD 84.3 billion from USD 95.8 billion last year.
Kumar, however, said the overall financial position of the government has been good. \u201cThe government has not budged on its fiscal deficit targets, though there is a demand for it. We feel in the current circumstances, the government should not care as much about the fiscal deficit but again, that is a very debatable point and there are different points of view,\u201d he added.
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