NPAs set to go up, admits SBI

Radhakrishnan, retiring at the end of this month, said interest rates are not likely to move southwards. “In the next five to six months, I don’t see any fall in interest rates. However, it is inevitable that we will have a low interest regime in the next two to three years,” he added.

At the moment government revenues are eaten up by interestpayments and salaries, he said. “To increase capital expenditure it is imperative that interest rates are reduced,” he added. Radhakrishnan said since interest rates are linked to inflation, the government should control price rise.

On the issue of providing credit to the infrastructure sector, the bank chairman said substantial loans are being sanctioned. “Today bank deposits are increasing because people are not ready to invest in capital markets or with NBFCs,” he said.

The bank has taken up with the government the issue of expediting the working of the Board for Industrial and Financial Reconstruction (BIFR) and the legal procedures for recovery of debts, he said. The people who have duped investors should be booked and jailed, the SBI chairman said.

Emphasising on improving public sentiments, he said more and more companies should come to markets with at par issues. “People are no longer interested in paying premium but companies prefer to issue equity at a premium as they want to service asmaller capital,” he said.

The government disinvestment in public sector units at a discount will help in improving market sentiments, he said. Moreover, small investors would return once companies start booking profits, he added.

On the gold deposit loans proposal, the bank chairman said the details are being worked on which would have to be approved by the Reserve bank of India. “Once we get the RBI nod the scheme will be launched,” he said.

Radhakrishnan was at Gurgaon to lay the foundation stone for the SBI academy which is expected to come up by the end of 2000. The academy is being set up as an apex all India training institute on a 12-acre campus. Designed as a fully residential academy with six channels, it will have the capacity to train 5000 middle and senior management executives annually.

It will also cater to the training needs of other Indian and foreign banks as well as of public and private sector undertakings in the areas of corporate finance, international banking and humanresources management. Presently such training programmes are being conducted at the existing SBI staff college at Gurgaon with an annual training capacity of 3000 officers.

In all the SBI group has 71 training institutes spread all over the country with an annual training capacity of 80,000 executives.