SBI Cards IPO to hit market this quarter: SBI Chairman

The increase in insurance cover for deposits to Rs 5 lakh from Rs 1 lakh was much needed and will create more confidence in among people about bank deposits, says Rajnish Kumar.What is your take on Budget?There were many measures introduced in the Budget. I think in the first reaction to the Budget, sometimes stock markets overreact. The theme and many significant measures in the agricultural sector, power sector, relating to income tax, MSME, financial sectors will far reaching consequences.Deposit protection will now be raised to Rs 5 lakhs as opposed to the earlier Rs 1 lakh; how does that change life for you, especially at SBI?We have always believed that no one needs an insurance cover as far as deposits in SBI are concerned. But talking of the system, after the problems with the cooperative bank which happened in Mumbai, there was a demand that the limit for insurance cover which was set some 27 years ago needs to be revised. This move was much needed and will create more confidence in the minds of the people about the banks.Most importantly wanted to understand the AGR side and this only came out in the fine print. What are you anticipating given the recent developments and how problematic telecom is poised to be. Could it turn out to be toxic? The matter is sub judice and let us wait for the Supreme Court decision. The hearing is on 4th February I think and what I believe is that the matter will ultimately be sorted out to the satisfaction of both the parties -- the government and the telecom operators. My general discussion with a lot of people in the telecom sector has hinted that we will have at least three to four large telecom operators and the country cannot be served with a lower number of telecom operators. This gives me confidence and hope that this matter will get sorted out.The fantastic news for SBI has been decent if we take one HFC account out – Dewan Housing – out. Is it safe to say that barring one account things are looking up at least on the corporate recovery front? Yes, definitely. This account was in trouble, and we were readying for it since September itself; we had started providing for it. I have said in the past also that from the recovery and resolution perspective, December and March quarters are likely to be very good for the banking system. We are expecting some good resolution and implementation of resolution plans in respect of a couple of large accounts.Overall loan growth came in at about 7%. Do you feel that given the parameters you yourself have discussed and the way things seem to be stabilising, we could expect to see something in the mid-teens this year? No, that will be very difficult. Right now the loan growth is around 7% and some of it has come from our international banking book. Another point to be noted is that there is more demand for foreign currency borrowings from the Indian corporates. The retail story is intact, we are growing very well, the only thing is the corporate sector demand revival. The loan pipeline is fairly good. As these loans get disbursed, FY21 growth numbers may turn out to be better than this year’s. The utilisation of limits definitely improved in the last two months and we may end up somewhere around 9% year-on-year growth. When we spoke to the finance minister on Saturday she said it is very easy for us to look at the bad news but let us look at the good news; autos have bottomed out, generally construction activity has picked up and things are not looking as terrible as they were let us say in the month of August and September. Are you getting a sense that corporates which were shying away from borrowing are now eager to borrow? Do you expect a radical recovery or things are going to be just very slow and gradual?In August-September, the mood was not as good but after November it has started changing. I also believe that as far as the economic growth is concerned, things have bottomed out and it is all about the sentiment. If you see our result, one very small but significant indicator is that the loan processing fee has improved significantly on a quarter-on-quarter basis. It indicates that during the December quarter we have processed more proposals. The loan pipeline is of more than Rs 1 lakh crore and all of these loans will get disbursed eventually over the next six months and that is a good indicator. Many brokerages are saying that SBI Cards valuation is going to be expensive; it offers limited appreciation. Your thoughts on the same and your message to the brokerage fraternity?At this stage I cannot comment on this thing but can only say that the penetration of credit cards in India is very-very low and as the economy develops, there will be demand for credit and credit cards and we are growing decently.Can we see the IPO this quarter?In all likelihood it will happen in this quarter.There was no recap via bonds announced in the Budget; do you see any trouble in fundraising this year for PSUs?No, I do not think so. There should not be a problem and the move by the government to divest stake in IDBI Bank and list LIC are two measures that stand out.

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