Kolkata: State Bank of India (SBI) chairman Arundhati Bhattacharya on Saturday said that the merger of associate banks with itself was a strong structural reform and results will start showing in 3-4 quarters.
Talking to media at the launch of SBI Institute of Management in Kolkata, Bhattacharya said six banks merging together on one day is not easy. According to her, it took quite a bit of time to stabilise the operations, and therefore the results will come over a period of time.
“It will not come in 90 days,” she said.
On 1 April, the state-owned largest lender completed merger of five of its associate banks as well as Bharatiya Mahila Bank with itself. She said the bank would deliver the results it promised over 3-4 quarters. “I will tell you to have little patience,” she added.
Bhattacharya also said recapitalisation of banks is necessary as to have a strong vibrant economy, a strong banking sector is necessary. However, a bank like SBI is not in need of it as the bank is well capitalised. “I think we have enough strength to raise the capital that is required,” she added.
However, banks which are in need of funds should be recapitalised, otherwise their operations may suffer. The government is considering it and if it considers that route through issuance of bonds, “the government would take a call after much deliberation.”
“I don’t even know if that’s the way chosen as these are talks in the market,” she further said.
Talking about the bank’s non-performing assets (NPAs), Bhattacharya said that slippages will come down though some new sectors, like telecom, are showing stress. According to her, the bank is doing extra provisioning for telecom sector which has been earmarked as under stress.
“This stress is not the kind we saw in the past 2 years,” she clarified.
On the newly inaugurated institute, SBI chairman said that it will not be restricted to SBI staff and will be open for banking professionals from other banks. Around 240 students can be accommodated in the institute with a hostel facility for 208 students and SBI would pick trainees from its middle management level.