Mumbai: State Bank of India (SBI) Chairman CS Setty has made it clear that the country’s largest bank has no plans to engage in a “rate war” over deposits. He emphasized that SBI’s vast deposit base is sufficient to support its credit growth with only minor adjustments in interest rates.
Expected Growth in Credit and Deposits
Setty mentioned that SBI expects credit growth of 14% to 16% this year. Even with a deposit growth of 8% to 10%, given SBI’s large base, the absolute numbers should match the credit growth. While some investable funds may shift to other asset classes, Setty said, “We are not entering a rate war for deposits; instead, we’ll rely on our service quality and extensive branch network to attract deposits.”
Minor Tweaks in Deposit Rates
He acknowledged that there might be slight changes in deposit rates, particularly for one to two-year terms, as competition for deposits is expected to continue. Setty shared these insights on the third day of the Global Fintech Fest (GFF), just two days after taking over as chairman.
Strong Corporate Credit Growth
Setty also noted that corporate credit growth remains strong at 15% to 16%, with SBI having a pipeline of ₹4 lakh crore in sanctions and disbursements. He observed that while companies are financing brownfield expansions with their own funds, there is renewed interest in expansion from core sectors like renewables and roads, indicating a potential return of private capital investment.
Focus on Technology and Resilience
SBI is working on a five-year plan focused on technology and resilience. Setty revealed that the bank is upgrading its YONO app to allow customers to start a transaction on one platform, like a branch, and complete it on another, like the internet. He said, “We are currently overhauling our IT platform to improve scalability, resilience, and cybersecurity, with a focus on attracting new customers.” The first phase of the YONO app reorganisation will be completed and tested with a closed user group by November.
Expanding Digital Capabilities
As the largest bank in India, SBI serves over 50 crore customers through 22,500 branches and processes 35% of UPI payments. Setty stressed the importance of scaling up liabilities through digital channels, similar to the success SBI has achieved on the asset side, where many customers are opening accounts using features like video KYC.
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