Mumbai, Jul 12 (KNN) Banks will have to look up to the small and medium enterprises (SMEs) for improving their profitability and registering growth even as the public sector banks continue to battle the problem of poor recovery and stresses assets, RBI Governor H R Khan has said.
 
Delivering a lecture here last month, he said, “Banks will discover the importance of the SME segment for profitability and growth and new models to serve SME segment profitably will be found as more than three fourth of the segment is still waiting to be served”.
 
Referring to the stressed assets, Khan said, PSBs continued to register the highest level of stressed advances at 11.3 per cent of the total advances as at end March 2014, followed by the old private bank at 5.8 per cent.
 
Though agriculture sector showed the highest GNPA (gross non-performing assets) ratio the industry sector showed distinctly high level of restructured standard advances, resulting in the stressed advances of the industry sector reaching 15.6 per cent followed by the services at 7.9 per cent as at December 2013.
 
There are five sub-sectors, namely, infrastructure {which includes power generation, telecommunications, roads, ports, airports, railways (other than Indian Railways) and others infrastructure}, iron and steel, textiles, mining (including coal) and aviation services had significantly higher level of stress and thus these sub-sectors/segments were identified as ‘stressed’ sectors in the banks’ lending portfolios.
 
The share of these five stressed sub-sectors to the total advances of the SCBs is around 24 per cent. Infrastructure has the highest share at 14.7 per cent in the total advances. Among the bank-groups, these five sub-sectors have the highest share at 27.3 per cent in the case of PSBs. (KNN/PC)