State Bank of India (SBI) President Rajnish Kumar said on Thursday that adequate liquidity is available in the system and interest rates have also come down substantially. Speaking in a webinar organized by the India Chamber of Commerce, Mr. Kumar said that both the RBI and the government have taken measures to bring the epidemic derailed economy back on track. “The government and RBI have taken steps to revive the economy,” he said.
Mr. Kumar said that RBI is responding quickly and has ensured that there is sufficient liquidity in the system. According to him, interest rates have also come down substantially.
He said that the government had laid great emphasis on direct bank transfer, helping MSMEs and announced reforms in agriculture, defense and mining sectors to create a favorable investment environment. “I believe the situation is returning to normal and many businesses are returning to normal operations at 70 to 80 percent capacity. Some of them have also started exporting”, he said.
According to him, the rural economy will play an important role in the revival process. Aviation, tourism, hospitality, service and construction sectors are most affected during agriculture
At least, Mr. Kumar said.
Regarding the Supreme Court’s observation on the moratorium on loans that banks are charging ‘interest on interest’, Kumar said that SBI has filed an application for interference with the IBA. “The case is sub judicial and it is better to wait till August”, he said.
Mr. Kumar also said that SBI is not charging higher interest rates for rating downgrades. He said, “We cannot imagine the COVID situation after this time and do not even know when it will come.”
According to him, SBI’s 143 per cent liquidity ratio is not an indicator of the fact that the bank is not
Borrow. Regarding SBI, he said that the bank has approved loan applications of two lakh MSMEs under the Guarantee Emergency Credit Line.
MSMEs are managing this crisis very well, he said, adding that working capital is being reassessed.