“I have said it in the past and still maintain that our unsecured book is better than the secured book,” SBI chairman Dinesh Khara told reporters after the bankannounced its results on Saturday.He added that the bank did not extend loans below Rs 50,000.
In response to analysts’ questions, Khara said that RBI has been in talks with banks on these issues, and that SBI’s interpretation is that the central bank is more concerned about the small loans extended to new-to-bank borrowers.
Khara said it was a possibility that the regulator may hike the risk weightage for this segment.
Bank of Baroda MD & CEO Debadatta Chand said, “Our unsecured loan portfolio is sound with low non-performing assets, and all the borrowers are our existing customers.” He said that new customers are extended unsecured personal loans only if they join with a salary account. However, Bank of Baroda has decided to moderate the growth of unsecured personal loans which have been growing at 60-70% because of their low base, to around 35% because of concerns raised on various fora. “Now that we have a track record of two to three years, we will analyse our portfolio and draw up a strategy for this segment,” he said.
IndusInd Bank chief Sumant Kathpalia, in an analyst call after the results, said that there is no stress in the personal loan book, but the stress is in low-value loans. “If you look at TransUnion data or any other bureau data, personal loan flows have not increased. So, there is no such thing on the personal loans. In the small-ticket personal loans cases, where the ticket sizes are less than Rs 50,000 or Rs 70,000, we are seeing some stress, but not in the other tickets. On the credit card also, there is a 30-plus flow of about 25 basis points, but nothing to be perturbed about as of now,” said Kathpalia.
Earlier, ICICI Bank also indicated that stress in the personal loan segment was higher in the small-ticket segment.