SBI sets up centre to monitor bad loans

State Bank of India (SBI) has set up a special Stressed Assets Resolution Centre (SARC) in Pune to monitor non-performing loans.

Narayanan Raja, SBI chief general manager for Mumbai local head office, said the bank would transfer all non-performing loans worth Rs 5 crore and below to this centre where they will be scrutinised and followed up by recovery officers.

About 35 branches in Pune and the adjoining Pimpri-Chinchwad will be covered under the SARC, said Arun Agarwal, deputy general manager for Pune.

"The central idea behind SARC is to relieve the branch-level staff from the work of following up with the defaulting units," Raja said.

The bank will get benefits from the centralised banking solution infrastructure it has put in place to monitor the loan assets, he noted. Raja further said the bank is planning to set up a network of processing centres for different operations and the front-end will be handled by the branch staff.

Setting up of SARC is part of this plan, he added. SBI will soon open similar centres in Aurangabad and Nagpur. The bank has already in place a Stress Assets Management Group to look after non-performing loans worth above Rs 5 crore. "With focussed effort, we hope to reduce the overall NPA level," Raja said.

Quoting the November 2006 figures, he said, the Mumbai circle had gross non-performing assets of Rs 900 crore (4.28 per cent) against Rs 25,000 crore of total advances.

The bank is looking at reducing this to 4 per cent by March 2007 and to bring down the net NPA levels from the current 2.28 per cent to 1 per cent by March 2007, he added.


BS Reporter / Pune January 04, 2007