"There are lots of hybrid instruments that can be looked at. There are ways of structuring loans so that we capture the cash-flow as it comes, rather than give a repayment schedule that is unrealistic and which cannot be met," Bhattacharya said, addressing a seminar at the Vibrant Gujarat Summit here.
    
The chief of the nation's largest bank said domestic banks practise "vanilla banking", which entails accepting deposits and lending the same as loans, but now there is a need to be more innovative.
    
"Banks need to be more responsive to needs of borrowers rather than sell standard set of products," she said.      

Bhattacharya's comments come at a time when the gross NPAs have reached 4.5 percent of total advances as of the September quarter, from 4.1 percent in March 2014, according to RBI. When the restructured assets are added, the ratio of stressed advances shoots up to 10.7 percent from 10 percent in March.
    
According to RBI, infrastructure, iron and steel, textiles, mining (including coal) and aviation sectors constitute 52 percent of the total stressed assets.
    
Bhattacharya also said that as the economy is evolving, banks have new opportunities for lending, and specifically mentioned the farm sector which has a high requirement of capital due to increased mechanisation.
    
The rapid growth in small businesses in a country like India also presents an interesting opportunity, she said, pointing out that only one in four SMEs currently takes advantage of formal financing. Banks need to evolve technologies to capture micro aspects like cash-flows of the companies to make lending calls easier, she added.
    
For the mid-corporate segment, she suggested hand-holding by banks and other institutions at the time of growth catapulting exercises like capital-raising as a necessity.

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