Two words describe Pratip Chaudhuri’s two-and-a-half year tenure with the State Bank of India (SBI) – ‘higher provisioning’. In his first quarter as the chairman of country’s largest bank, he took a hit of 99 per cent in profits due to higher provisioning of Rs 10,000 crore due to non-provision of pension liability for the previous five years.
Yesterday, the bank’s first quarter profits fell 13.6 per cent due to rise in bad loans, provisioning for pension and loss in the value of investment bonds. Even the provision coverage ratio fell from 66 per cent to 60.6 per cent. But Chaudhuri had little option in front of him, more provisioning would have meant further hit in profits – something he did not chose to do.
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