Pvt investors ready to chip into stressed assets fund : Arundhati Bhattacharya, Chairman, SBI, and Sanjay Nayar, CEO of KKR India
Updated on: 11 Jun 2016
In this week's edition of Indianomics, SBI Chairman, Arundhati Bhattacharya tells CNBC-TV18 there are enough private investors willing to pump money into a stressed asset fund.
Speaking to Latha Venkatesh she says the reason for banks proposing to hold majority stake in these funds was that they feel the pain most.
She further said that the banks will be able to put together stressed funds with the help of the National Investment and Infrastructure Fund (NIIF) and the government will invest on stressed funds after investing in infrastructure funds.
Bhattacharya did point out that foreign funds will not invest if their loans are treated below bank loans as they want around 10-12 percent return on their investments in stressed loans.
In the same interview Sanjay Nayar, CEO of KKR India says investors need to be roped in to bail out banks as they need more time to factor in the stressed asset hit.
He also points out at a capital shortage in the system.
Below is the transcript of Arundhati Bhattacharya and Sanjay Nayar's interview with CNBC-TV18's Latha Venkatesh.
Q: What is your sense after all these meetings of the last two quarters, are you getting a sense that banks and the government have at least got the problem in control and we are on the way to better health?
Bhattacharya: I should definitely think so. I think most of us are on the same page in the sense that after having classified so many accounts, it is also important to ensure that the ones amongst these that are already working that they be sustained. India is very resource poor.
We cannot afford good units to go down. Not only that, when units go down there are a lot of collateral damage including their own people who are employed there, plus the supply chains and the other dealerships etc that they support. So, it is important for us to ensure many of these units continue to function and function well.
Q: Foreign capital has helped or even private equity capital has helped rehabilitate assets in countries like Italy and Greece. Can you give us an idea of how things are worked out in other countries with similar problems?