There is no recession in the country, just decline in demand in certain sectors: Rajnish Kumar
Banks sitting on comfortable liquidity position, State Bank of India Chairman Rajnish Kumar said.
Kumar also said that India is a part of the world economy, and if there are global headwinds, "we cannot remain unimpacted".
Kumar, who was in Guwahati to attend consultation process designed to generate ideas and review performance of banks and their alignment with national priorities, said, “ The finance minister Nirmala Sitharaman announced 32 measures on Friday which are very qualitative in nature. The purpose of these measures to clear many irritants from banking and taxation side. I consider these very significant”
He added, “The system right now, in terms of liquidity and enablers for flow of credit right condition is made by government and Reserve Bank of India. The issues and challenges which were coming in the flow of the credit it has been addressed and the finance minister has announced that some more measures will come up which may be can be sector specific.”
"Banks like SBI are sitting on a comfortable liquidity position. What is needed is flow of credit. There is some new trend about aggregator model... people prefer to use Ola, Uber for their transport. There is some shift visible from people wanting ownership of vehicles. This is a global trend and India is not an exception," Kumar told reporters.
He added, “Many of the thing which was on the wish list of the industry has been addressed and soon we will see the credit flow.”
Kumar said that it is not a recession, in certain sectors there is decline in demand, particularly in auto.
“Decline in auto sales is a global trend. However there is no shift in demography in India. Aspiration of youths has not changed. We are country which want higher growth trajectory however we are part of larger global economic systems. When there are global headwinds we cannot remain unimpacted.”
Kumar hoped that good monsoon will have a positive impact.
Increased spending by the government and the upcoming festival season would boost demand. “The second half will be good for economy and banking. The government has announced that it will clear all payments this will improve the credit flow. Right now it more of government intervention however I am hopeful that private sector investment will also revive.”
Stating the non-performing assets (NPA) level has improved in Assam in comparison to last year, Kumar said, “ The bank is working in making service points available in the tea estates of Assam and West Bengal.”
The SBI chairman announced that blueprint of social banking and the consultative meeting on ideation will be ready by September.