SBI Chairman C S Setty said the bank’s mortgage loan portfolio crossed Rs 9 lakh crore last month and expressed optimism that the momentum in the RAM segment will drive 14 per cent overall credit growth during the current fiscal year.
Retail, Agriculture and MSME (RAM) segment, which is 67 per cent of the total loan portfolio, has also crossed INR 25 lakh crore milestone in September. With the improvement in economic growth, SBI upped its credit growth target from earlier 12 per cent to 14 per cent for the ongoing financial year.
“We increased guidance on credit growth. We have revised it from 12 per cent to 14 per cent. We see a robust credit growth, particularly from the RAM segment, MSME is almost growing at 17-18 per cent and agriculture and retail are around 14 per cent,” he told PTI in an interview. Besides, he said, the bank is witnessing good growth in gold loans, while express credit, which is an unsecured personal loan, will have double-digit growth. Corporate credit, which had been slow for some time, saw a turnaround with 7.1 per cent growth during the second quarter.
“Our guidance on the corporate credit would be in the lower double digit, which means that overall, a 12-14 per cent credit growth rate seems to be achievable,” he said. The Reserve Bank’s decision to further slash the key policy rate by 25 basis points would make loans cheaper and drive demand for fresh credit.
Setty, the chairman of the country’s biggest lender, had expressed confidence in achieving its 3 per cent net interest margin guidance despite RBI’s 0.25 per cent repo rate cut in the December policy. Last week, the Reserve Bank of India (RBI) lowered the repurchase, or repo rate, by 25 basis points to 5.25 per cent and retained a neutral stance, which gave room for further rate cuts.
The rate cut came after a gap of six months with a view to further bolster growth, which hit a six-quarter high of 8.2 per cent in Q2 of FY26. The SBI chairman also said the bank may not need equity capital to drive credit growth and maintain a capital adequacy ratio of 15 per cent over 5-6 years.
“Even before this QIP was raised, our ability to fund credit growth has never been a problem. We wanted to strengthen the capital ratios, so we have. Our long-term strategy is to maintain CRAR at 15 per cent and Common Equity Tier 1 at 12 per cent,” the chairman said.
This kind of Capital to Risk Asset Ratio (CRAR) gives the bank the ability to fund advances over Rs 12 lakh crore, Setty said. “With a profit rate like what we have today, if the same profitability is maintained for another 5-6 years, we may not require any capital raising, at least on the CET 1 part,” he said.
