(SBI), the country’s largest lender, kept nearly all of its 22,000 strong branches and nearly 60,000 automated teller machines (ATM) functional during the (Covid-19) lockdown and went virtual to reach out to its customers, with top officials directly connecting with customers to explain a range of products that the government introduced as part of its stimulus packages.

“Not even a single working day of the lockdown, our branches were not functioning. Barring 100-150 branches in the containment zones, all branches were operational. We ensured that the banking services are available to all our customers across our channels. We have three major channels – branch, ATM and banking correspondents. In this lockdown, 90 per cent of our were operating all through. For any ATM network, this uptime is one of the best,” said CS Setty, MD for Retail &

The bank is now going virtual to meet its customers directly, and has organised 125 e-town hall meetings for its micro, small and medium enterprise (MSME) customers.

In one such meeting last Friday, Setty and general manager S Kalyanram was seen taking questions from various MSME customers on products ranging from Guaranteed Emergency Credit Line (GECL) to Mudra Loan schemes to anyone who wanted clarification on the issue. About 800 participants took part in the programme.

Setty told Business Standard that under GECL, about 150,000 loans aggregating Rs 15,000 crore had been sanctioned by the bank. The bank is in the process of offering GECL funding to its entire customer base by the end of June.

However, the customers have not taken the full amount sanctioned under the scheme because of the lockdown. Out of the sanctioned amount, the bank has disbursed Rs 8,800 crore to 83,000 customers.

“We expect customers to avail the residual limits already sanctioned on partial easing of lockdown and once the activities restart,” said Setty.

While most are cutting down on personal loan exposures during an economic slowdown, SBI saw a significant traction in the last three months. About 326,000 loans aggregating to Rs. 9,600 crore was sanctioned in the last three months, Setty said.

During the lockdown, the bank saw a healthy number of transactions as well. “Our bank’s average daily transactions during 23 March to 11 June was 15.70 crore against peak 23 crore transactions during normal times,” Setty said.

“During April, we have sanctioned around 4,600 new loans (both working capital and term loans) aggregating Rs780 crores. There is an improvement in May and about 15,000 new corporate loans aggregating Rs 1,800 crore have been sanctioned,” Setty said.

“We at SBI are open. We have not shied away from lending anytime. Wherever we are engaged, we have fully supported the sector,” Setty said in one of the virtual meetings with clients last Friday.

The bank also plans to shift its home loan sanctioning mechanism completely online in a couple of months. It’s home loan book is about Rs 4.5 trillion, and all the customers were given the offer of availing the moratorium. However, the bank’s strategy of targeting mainly salaried employees, especially from the government and defence sectors meant that the moratorium seekers were relatively less in the bank’s portfolio. SBI chairman recently said just about 23 per cent of its entire customer base asked for a moratorium.

“At the end of May, we found that 80 per cent of our term loan customers have actually paid at least two instalments out of three,” Setty said.

However, the low credit growth continues to remain a concern for the bank.

“Our accretion to deposit in the last two months of this year has been significant. Hence, we need to deploy our funds. As a proxy to the economy, SBI’s credit growth mirrors the economy. However, given the present economic scenario due to the Covid-19 impact, credit growth in the current year is expected to be muted and much will depend on pickup in the second half of the financial year,” said Setty.

Setty doesn’t expect the entire MSME and corporate customer base to report stress after the lockdown is lifted, but “impact faced by some sectors such as tourism, hotel industry, entertainment etc. may be long drawn. Those sectors will require support over a longer time frame. Hence approach has to be sector specific based on the impact,” the SBI managing director said.

The SBI MD said the government’s fiscal plan may be adequate for the next six months, but depending on prolonged lockdown and partial lifting, need for restructuring cannot be ruled out to protect the asset and enterprise value.

“In our view units impacted by Covid may rather seek restructuring and not one-time settlement,” Setty said. As far as taking stressed customers for insolvency proceedings, the State Bank managing director is of the view that the bank will resort to the NCLT route only if “the economic value of the asset is protected by taking the NCLT route and revival of the activity will happen”.

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