SBI tweaks recovery model

BL :15 Feb 14

With bad loans surging 27 per cent year-on-year to touch Rs. 67,799 crore towards the end of December, State Bank of India has got into a ‘non-performing asset control’ mode, tweaking its recovery model and setting up committees to check further slippages.

The bank has created four General Manager positions for North, South, East and West to focus more on bad loan recovery.

These officials will be in charge of the stressed assets recovery branches (SARBs) in the circles, said SBI Chairperson, Arundhati Bhattacharya.

“We have also made it easier for the other verticals – Corporate Accounts Group (CAG) and Mid-Corporate Group (MCG) – to migrate all their accounts which need hard recovery measures into Stressed Assets Management Group (SAMG).”

“And with this we hope SAMG will be much more focussed and be able to bring about faster (NPA) resolution,” she said.

Committee approach

India’s largest bank has created various committees to look into stressed assets and accounts that are beginning to show weakness.

“The largest of the committees, the one that looks at the largest loans – those above Rs. 500 crore – is headed by me,” said the SBI chief.

The committees that look at loans between Rs. 100 crore and Rs. 500 crore and between Rs. 50 crore and Rs. 100 crore are headed by Pradeep Kumar, Managing Director (Corporate Banking), and Soundara Kumar, Deputy Managing Director (Stressed Assets Management Group), respectively. The committees that look at loans between Rs. 25 crore and Rs. 50 crore and between Rs. 5 crore and Rs. 25 crore are headed by the heads of circles/verticals and by the General Managersrespectively.

Loans between Rs. 1 crore and Rs. 5 crore will be looked after by Deputy General Managers.

“So, with these committees in place, there are weekly reviews of the accounts. We do an ABC analysis of the ones that require immediate attention and then there is a follow-up on the action points to ensure that the accounts get enough attention, and the chances of their slipping are minimised,” said Bhattacharya.

ABC analysis is an analysis of a range of items that have different levels of importance and should be handled and controlled differently.

(This article was published in the Business Line print edition dated February 15, 2014)

SBI chairman summoned to court on last day in office

BL :Vinsonkurion ;Thiruvananthapuram, Sept. 29:2013 

Contempt petition filed by officers’ union for withdrawing ‘check-off’ facility

The Madras High Court has issued a notice to Pratip Chaudhuri, Chairman of State Bank of India, to present himself in court on Monday, his last day in office.

Chaudhuri and Ranjit Goswami, Chief General Manager (Human Rsources) of the bank, have been summoned in a contempt petition filed by the SBI Officers’ Association and State Bank Officers’ Federation.

A notice has been sent to Chaudhuri in his personal name as well, D. Thomas Franco Rajendra Dev, General Secretary of the Officers’ Union, Chennai circle, informed Business Line.

The contempt petition was invoked against breach of an interim stay on a contentious circular issued by the bank withdrawing the ‘check-off’ facility provided to the association.

This facility provided a lifeline to the association in the form of individual subscriptions from salary accounts of member-officers routed to its account by the bank.

LIFELINE

The management ensured that subscriptions ranging from Rs 100 to Rs 200 per employee went into the association’s account on the 25 {+t} {+h} of every month, the salary payment day.

The convention has been that, at the time of joining, every employee gives a standing 

instruction in writing authorising the bank to deduct the sum from his/her salary account.

The management has sought to withdraw the facility suggesting to members of the unions that they pay up their subscriptions individually, Rajendra Dev said.

Earlier last week, the court had allowed a petition seeking an interim stay on the management’s circular withdrawing the ‘check-off’ facility.

While grating the interim stay, Justice N. Kirubakaran had observed that the facility was in operation right from 1975.

It is sought to be withdrawn, and in fact given effect on September 17, 2013, at a time when a similarly placed union (staff union) is enjoying the same benefit.

ORDER IGNORED

“This amounts to discrimination,” Justice Kirubakaran said in his order, copy of which is available withBusiness Line. 

But the management chose to ignore the stay order and went ahead to pay the salary on September 25 without effecting the check-off facility to members of the circle associations.

This is what forced the unions to file a contempt of court petition, Rajendra Dev said. SBI officers and clerical staff unions have a combined membership of more than two lakh.

vinson.kurian@thehindu.co.in

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Contempt petition invoked against breach of an interim stay on a contentious circular issued by the bank’s management withdrawing the facility where subscriptions of member-officers are routed to the association’s account by the bank.

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State Bank auctions wrong plot

Source  :Deepender Deswal, TNN Dec 29, 2011, 07.01AM IST




ROHTAK: In a strange case, the state bank of India (SBI) auctioned a plot of a senior citizen to recover the amount following default of repayment of loan taken by another person.


The owner of the auctioned plot had been running from pillar to post for the last six months but he failed to get any relief from the bank, the police or the court. His plot was auctioned on Tuesday on the orders of the debt recovery tribunal (DRT) in Chandigarh.


According to information, Jai Singh and Om Prakash had purchased plots measuring 107 square yard and 124 square yard respectively from one Malha Ram in 1980 in Rohtak. Jai Singh disposed off his plot to another person, Dharambir Singh in 1998.


The dispute began when Jai Singh allegedly furnished an old registry of the plot (which he had sold) as guarantee in bank for one Rajesh of Chiri village who had taken loan in 2004. Rajesh defaulted in payment of the loan and the bank started the process of auction of the said plot in February 2011.


The problem began when the bank earmarked the adjacent plot owned by Om Prakash instead of Jai Singh's plot for auction. Om Prakash was shocked to find a notice from the DRT, Chandigarh, pasted on the boundary wall of his plot. When he approached the bank officials and told them that they had "erred in serving notice" on him, they told him that they had identified the right plot for auction.


Om Prakash lodged a complaint with the police against Jai Singh alleging fraud and also wrote to the public grievances department of the SBI. But he got no relief from the police or the bank authorities and finally he filed a petition in a Rohtak court demanding stay on the auction.


The court however declined to stay the auction. He filed an appeal in the district court in Rohtak on Tuesday, but the DRT officials auctioned the plot the same day.


Stating that it was a fraud, Om Prakash alleged, "I suspect that the bank officials are hand-in-glove with Jai Singh and Rajesh who defaulted in loan repayment and I am being made to suffer for the misdeeds of the duo".


SBI's chief manager at Rohtak Hans Raj told TOI that they had earmarked the right plot for auction on the basis of location and dimensions mentioned in the documents regarding guarantee. "We have received the complaint and referred it to the higher authorities for further action," he added.

NPA provisioning of SBI increased three-fold between 2008-2011

Source:DRG TUESDAY, 30 AUGUST 2011 17:30

Rising bad debt has forced State Bank of India (SBI) to increase its provisioning more than 

three-fold to Rs 8,792 crore in 2010-11 from Rs 2,474 crore in 2008-09 informed the 

government.

 

Finance Minister Pranab Mukherjee while addressing through a written reply to a question raised in the Rajya Sabha said, this provision in 2010-11 includes a counter cyclical buffer of Rs 2,330 crore toward achieving the 70 per cent Provision Coverage Ratio prescribed by the Reserve Bank of India over-and-above the prudential provision.

The NPAs have gone up substantially in agriculture, small scale industries and corporates, he said. 

 

While naming the defaulter companies, he informed that, in the year 2010-11, outstanding loans of Rs 210.34 crore given by SBI to Shah Alloys Ltd turned into NPAs. At the same time, an outstanding loan of Rs 193.99 crore to Indorama Synthetics became a NPA.

 

The government has received a proposal from SBI for raising capital through various instruments -- Qualified Institutional Placement (QIP), Preferential Allotment, a Follow-On Public Offer and a rights issue. The proposal is under examination, said Minister of State for Finance Namo Narain Meena.

SBI provisions for non-performing assets by 96% to Rs 2,160 crore

Source :9 NOV, 2010, 01.37AM IST,ET BUREAU & AGENCIES 

SBI profit flat at Rs 2,501 cr on bad loan provisioning

State Bank of India , the nation’s biggest lender, said quarterly net profit remained almost static belying expectations as it set aside more funds for bad loans and lost money trading bonds and currencies. 

The bank said net profit for the quarter ended September 30, 2010, was Rs 2,501.37 crore, up from Rs 2,490.04 crore a year earlier.


 The poor show was due to meeting higher provisioning norms.


 Both the treasury and corporate banking faired poorly. Pre-tax treasury loss stood at Rs 410 crore as against a profit of Rs 1,341 crore a year earlier. Pre-tax earnings from corporate banking fell 12% to Rs 1,241 crore from Rs 1,408 crore a year earlier. 

The lender increased provisions for non-performing assets by 96% to Rs 2,160 crore expanding the provision ratio to 62.8%, from 60.7. 


The Reserve Bank of India, in October 2009, said it would require banks to increase the minimum provision ratio to 70% from 10%. 


Gross bad loans rose 34% to Rs 23,200 crore accentuated by `854 crore bad loans of its associate, State Bank of Indore that merged with it. 

“Most state-run banks reported accelerated growth in non-performing assets this quarter,” Sandeep Jain, an analyst at IDBI Capital Markets told Bloomberg.


 “SBI’s doubled provisioning could indicate a similar spike,” he said. Retail banking was a saving grace for the bank that will soon be under pressure as the central bank is forcing banks to get rid of ‘teaser rate’ loans, especially in mortgages.


 Loans to individuals led to a pre-tax profit of Rs 3,470 crore, that doubled from Rs 1,702 crore a year earlier. With RBI raising the rates for the sixth time this year, demand for loans may fall hurting the banks’ earnings further.

Auction Sale,-SBI, Patna-7thMay,2010