Your Bank has refined its underwriting and credit risk management practices, to meet the changing economic environment. As the largest bank in the country, we strongly believe in operating within a secured risk framework and in growing responsibly.

Our main priority, as we work through 2019, remains the disciplined execution of our credit policies, to measure, assess monitor, and manage risks methodically across all our portfolios.

Over the last few years, we have witnessed a significant rise in the Gross Non-Performing Assets (GNPA) within the Banking Industry at large. However, in the financial year under review, the GNPA of the SCBs declined due to robust economic growth of the Indian economy and the strengthening of due diligence, credit appraisals, and loan monitoring systems, among others.

The slippage ratio improved to 1.60% in FY2019 (down by 325 bps YOY) and credit cost improved to 2.66% (down by 96 bps YOY). The Provision Coverage Ratio (PCR) of your Bank has improved significantly by 1256 bps YOY from 66.17% as on March 2018 to 78.73% as on March 2019.

At your Bank, large accounts from the 1st and 2nd list of accounts referred to NCLT have now been resolved. The remaining are also being pursued for quick settlement, while the provisioning therein is already significantly higher than the level of haircuts envisaged. The resolutions have given us an opportunity to deploy the realised funds into income yielding assets and helped strengthen our balance sheet.

Furthermore, based on model already implemented by SBI, the Government of India has directed other Public Sector Banks for creation of a Stressed Assets Management Vertical (SAMV). We, therefore, take immense pride in being a pioneer for establishing a dedicated vertical, almost a decade and a half back, by establishing the Stressed Assets Management Group (SAMG). In order to focus on the resolution of stressed accounts, SAMG was renamed as Stressed Assets Resolution Group (SARG), which continues to work as a specialised vertical for efficient resolution of high value NPAs. In view of the progress achieved so far, SARG has evolved into a centre of excellence for the resolution of NPAs and stressed assets. As on 31st March, 2019, SARG had 20 Stressed Assets Management Branches (SAMBs) and 56 Stressed Assets Recovery Branches (SARBs) across the country, covering 70.62% and 83.71% of your Bank’s Non-Performing Assets (NPAs) and Advances under Collection Account (AUCA), respectively.

Today, SARG stands as one of the important verticals within your Bank. With the advent of IBC and the no. of accounts already referred and in an advanced stage of resolution, the redeployment of funds parked in NPAs and the write back in provision contributing to the Bank’s profitability, strengthening of Balance Sheet as well as capital ratios is likely to be significant.

At your Bank, we believe that our effective credit underwriting processes will help us attain quality growth and respectable shareholder returns. We have proactively worked towards making the banking system efficient and credible, to be able to serve a transforming India.