It was a weak show from South Indian Bank in the third quarter. Loan growth was down to single digit, while gross NPA remained elevated with no sign of improvement.

Discussing the quarterly performance and outlook going forward VG Mathew, MD & CEO of the bank said overall asset quality was quite comfortable because special mention account (SMA)-II improved from September to December.”

He further added that there was stability seen in the corporate book. “The large corporate book, which has been giving lot of trouble in the last 4-5 years has seen complete stability. Moreover, the large two accounts, which had been on the watchlist in the last quarter have been recognized as NPA in this quarter," said Mathew in an interview with CNBC-TV18.

So, the bank now does not see any concerns with regards Rs 100 crore and above book, which was a big concern in the last 5 years, he said, adding that focus on agri, MSME, and retail book would give them lot of stability and comfort.

“The large corporate book which was around Rs 11,000 crore in 2014, today stands at Rs 7,300 crore. The corporate book of Rs 25 crore and above has come down from 35 percent to 30 percent of the total loan book. So, there is a lot of stability on the balance sheet today,” he added.

The bank is hopeful of a loan growth of 10-12 percent in FY20. “The corporate side will now stabilize because we had committed that the corporate book will come down from around 45 percent in 2014 to 30 percent this year and we have achieved that in this quarter itself. All readjustments we have already done,” said Mathew.

When asked about their exposure to the telecom sector he said, “We do not have any telecom accounts on our book.”

On slippages, he said, “There are two accounts from the corporate; one is about Rs 114 crore and other is around Rs 75 crore, so total of Rs 189 crore. The remaining, all are from the mid-corporate, MSME, agri, retail, which amounts to about Rs 160 crore and that is absolutely comfortable for us.”

“Going forward in 2021, maximum slippages are expected to be around Rs 800-1,000 crore in a year; that is about Rs 200-250 crore per quarter,” he said.