'Banking's NPA situation to improve by fiscal-end'

SBI Chairman Rajnish Kumar on Saturday said most banks will be in a good position by March-end, with respect to stressed assets and there is no dearth of liquidity in the system for lending.

He added that there are opportunities to lend in sectors such as infrastructure and consumer lending, as there is not much of a decline in consumer demand.

"By March 31st, most of the banks will be in a good position with respect to stressed assets," Kumar said at the 92nd Annual Convention of industry chamber FICCI.

On the transmission of monetary policy, he said the banks cannot lower rates beyond a threshold value, due to asset-liability mismatch issues.

Kumar stated that there is no shortage of capital in the system, but the corporates are not borrowing enough and are not utilising their capacities well.

On lending to the telecom sector for the next round of spectrum auctions, he said, "For us, lending to the telecom sector for spectrum is completely unsecured. Although on paper it is secured as the auction is to be done by the government, but practically it is totally unsecured."

"So in such circumstances, banks will have to evaluate carefully before lending to the sector as the probability of default is very high," Kumar said.