Unsecured loans are not a problem, according to SBI Chairman

Chairman of State Bank of India Dinesh Khara stated that the segment’s gross non-performing assets (NPAs) stand at a mere 0.69 per cent, and there are no worries regarding the bank’s portfolio of unsecured loans.

SBI’s statement coincides with Reserve Bank of India Governor ShaktikantaDas’s concerns last month regarding the exceptionally rapid growth of some personal loan components.

“We are not concerned about unsecured loans at all. When asked about the future of unsecured loans, Khara responded, “I have stated it in the past and I still maintain my stance that our unsecured book is better than secured loans.

With a gross non-performing asset (NPA) of just 0.69 percent, he said the bank’s book of unsecured loans is approximately Rs 3.2 lakh crore.

The majority of the bank’s unsecured loans—nearly 86%—go to people who have salary accounts with it and are employed by the government. The percentage rises to 94% when armed forces, paramilitary forces, and public sector organizations are taken into account, he said.

Only roughly 6% of unsecured loans are given to highly compensated, well-rated corporates.