Market has been unfair to SBI stock, says Rajnish Kumar

We are not raising any capital; we have an enabling resolution of raising Rs 20,000 crore but I doubt that we are going to use it in the near future, says SBI chairman.

Markets liked what you indicated in terms of where the future for State Bank of India is headed. Without getting into specifics of what you have declared for the quarter gone by, let us understand how will life look for SBI once the moratorium gets lifted?
Even during this COVID period, I am talking first about the operational part. I will come to the credit quality and other things later on. We have operated at full capacity. All our branches are 98% operational except wherever some local issues are there. All our internet banking, mobile banking, ATMs have performed at the level they were doing pre-COVID-19. And that speaks volumes about the quality, determination and courage of the people who work in State Bank of India. If you have such a committed workforce, then whatever is the situation, we are capable of facing it. If we can face it in operations, we will be able to face it as far as our asset quality is concerned, earnings are concerned or business growth is concerned. We have very strong processes, high quality committed manpower, the best in class IT digital and analytical capabilities. The challenges keep on coming but if you are a resilient organisation like the State Bank is, you will be able to overcome any challenge which comes.

Do you think the demand everything is coming back as per your expectations since the lockdown has been lifted or have there been pocket of surprises also?
It all depends upon the sector. Some of the sectors were very severely impacted and remain impacted say for example hotels, tourism, aviation. These sectors will take considerable time before things get normalised. But other sectors like power; power demand has almost come back to the normal or pre-COVID situation. Even in steel, the production went down but it has come back to 75%-80% of the capacity. Automobile is yet to see a good pick up, still, things are happening and it may take some time. It all depends upon the sector to sector but things have started coming back to the normal and ultimately from the supply side. When the outlets start operating and the consumer sentiment changes, in terms of the fear of virus going out of their mind, we will have a better idea about demand coming back. But, overall, the demand is returning and the supply chains are being restored.

Do you expect the credit culture in India could change because of this moratorium?
No, it is not about India. When there is a disruption of the cash flow, then under such circumstances, globally, all regulators including the ones who are supposed to be as tough as our Reserve Bank of India are realising the situation. If some dispensations have been given the credit culture would be impacted by this moratorium -- I do not subscribe to that view. It is a realisation of the ground reality and it is a realisation of the fact that people want to pay but if there is a disruption to their cash flow, which is not in their hands, then in such circumstances it is logical that repayment is aligned to your capacity to pay and this moratorium is a realignment to their capacity to pay and not about their intent. I do not think that this going to impact the culture, the people who do not pay, they do not pay whether COVID or no COVID and the people who want to pay, they are paying even in COVID and the statistics are with us. 82% of customers have paid more than two instalments despite the moratorium being available. We should not, at least I do not, subscribe to this thing. This is not a phenomenon which is peculiar or an exception to India. In fact, our regulatory guidelines as on date are much tighter than what they are in other countries.

Less than 20% of your total borrowers right now have opted for moratorium. That number is a very smart number and clearly tell us that you have a very strong retail book; can I safely conclude that?
Yes, that is what we have always said, and numbers only prove that. I have always said that our business segment is different. And the difference is that we cater largely to the one employed by the governments or by the well-known corporates. So, the impact on these employees is much less and that is why this performance.

Why are you raising capital when all the ratios are favourable for you? You are in a golden spot, your CASA has gone higher, NBFCs are finding it difficult to lend, your balance sheet is strong, your reach is strong and yet you are raising capital?
I am not raising capital.

Bonds?
No, the bond issue is our regular MTN program so that is just a board resolution. We are not doing anything exceptional or raising capital. We have a running MTN programme where we keep on raising the money, paying the money but that is all for our overseas operations. We are not raising any capital and we do not intend to as of now because we have sufficient levers and we have sufficient cushion in our earnings, subsidiaries, our loss asset and G3 accounts where we have 100% provided. We have an enabling resolution of raising Rs 20,000 crore but I doubt that we are going to use it in the near future.

Every shareholder of State Bank of India says 'hamara din kab ayega' (when will our day come)? When do you think the time for SBI shareholders will come back?
The market is such a thing that whatever you do, you cannot fight the market. They find a reason to go down. I sincerely believe that market has not been fair to State Bank for whatever reason but that is ultimately the choice of the investors. If you look at our performance, nobody has been able to fault us on that. I made an observation in one of the analysts meets that if somebody sneezes, we feel that State Bank will get flu but that is not the case. So I cannot help it but the fact of the matter is that if you look at our balance sheet today and the size of the balance sheet and the earnings, there is no reason that our stock should have gone down in value so much. But I know I have no capability or capacity to deal with the market, the market is market.