Asserting that there is muted demand for loans, SBI Chairman Rajnish Kumar on Monday said banks are not risk averse but they are being prudent in these trying times to avoid a repeat of the post-2008 scenario when there was “dilution” in credit underwriting standards.
Data clearly shows that investment in the economy has come down, the head of the country’s biggest lender said.
“If the capex (capital expenditure) is not happening and investment in the economy is not happening at the same pace, then obviously this is a demand issue and the risk aversion would be where there is a demand and banks are not lending,” he said at a virtual event organised by AIMA.
Non-food bank credit grew 6.7 per cent year-on-year in July as against a growth of 11.4 per cent in the same month of the last year, as per latest data by the Reserve Bank of India (RBI).
