Mumbai: India’s largest lender SBI on Thursday raised concerns over the proposed farm loan waivers by Andhra Pradesh and Telengana Chief Ministers, saying it may mount the already high stress on its agriculture portfolio in the first quarter.
“Stress in our agri portfolio in Q1 will not be so much because of the monsoon deficit as that does not translate into stress so quickly, but definitely on account of the proposed debt waiver (in Andhra and Telengana) yes,” SBI chairperson Arundhati Bhattacharya said after the bank’s 59th annual general meeting.
She was answering a question on the impact of the proposed farm loan waivers, running into over Rs 1 lakh crore in Andhra Pradesh and Telengana by their newly-elected chief ministers N. Chandrababu Naidu and K. Chandrasekhar Rao.
While the agri loan book in AP is worth Rs 87,000 crore, the data for Telengana is not immediately available.
Ms Bhattacharya said already the issue has created problems in Telengana and AP as people have stopped paying the dues. On the overall non-performing loans in the banking sector, she said with the improvement in the macroeconomic environment and an expected revival in growth, should mitigate risks and resolve problems of asset quality.
“This stress is lessening and so hopefully going forward the number should look better,” said Ms Bhattacharya, who for the first time in the history of the over 200-year-old bank had sold Rs 3,500 crore NPAs to ARCs last quarter.
