SBI fears Demonetisation may keep slowing India’s Economy

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Danish Siddiqui/Reuters

State Bank of India today said the financial performance may not correspond with its “forward-looking” statements on account of several factors.

Danish Siddiqui/Reuters

Bank also said the demonetisation has and is likely to continue slowing down indian economy for long run which will negatively impacting their business, PTI reported on Sunday. In its Preliminary Placement Document to investors, the country’s largest Bank chain highlighted its concerns and possible risks before its Rs 15,000 crore share sale through private placement.

According to source, demonetisation has already reduced the GDP growth to about 2% and it may continue to result in a slowing down of the Indian economy, which may adversely affect the bank’s business,” the statement said. The bank said the financial performance may not correspond with its “forward-looking” statements on account of several factors.

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The issued bank statement said there was an increase during note ban in current account and savings accounts deposits in banks. The bank expressed concerns that SBI risked facing increased competition from commercial banks and other lending institutions with a chance of losing out on profits if it fails to compete.

“The move could also result in an increase in compliance costs and higher incidents of fraud,” the document said. “Any one or more of these events, if and when they occur, could have a material effect on the bank’s business, results of operations, financial conditions as well as reputation.”

The Centre had demonetised Rs 500 and Rs 1,000 notes in November 2016 as part of its crackdown against black money and corruption. The drive had led to a severe cash crunch in the country.

Source : Scroll.in

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