Worsening asset quality

There appears to be a clear deterioration in the performance of State Bank of India (SBI) in the second quarter of the current financial year. It cannot entirely be explained by the slowdown in the economy. The bank had expected to gain from an improvement in sentiment as a result of a pickup in the monsoon, but that has not happened. In fact, as the largest bank, it seems to have set the tone for other large public sector banks, which together account for a major chunk of the banking sector and have all performed poorly.

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