The country's largest lender State Bank of India (SBI) is expecting to achieve a credit growth of 12 per cent to 14 per cent this fiscal year, its Chairman Rajnish Kumar said. The bank's credit growth was 14 per cent in the last fiscal year, he said. "Given the size of the bank's balance sheet, a growth between 12 per cent to 14 per cent is satisfying," Mr Kumar said. He was in the city to attend the multi-level consultation programme of the branch managers of SBI in the region.
The lender's loan portfolio stands at around Rs 23 lakh crore, he said adding the bank has sufficient liquidity to deploy. "There is a need for demand of corporate credit", Mr Kumar said.
The bank's retail credit of total advances is 57 per cent while the corporate lending accounts for the rest, he said adding the ratio is "not going to change in a significant way".
Expressing concern of NPAs arising out of the agriculture credit, Mr Kumar said, "There is a need to tackle farm credit. High NPAs in agriculture is an issue, though itis not by intent but by capability."
He said the flow of credit to the agriculture sector gets impacted due to debt waiver schemes.
The SBI chief said direct benefit transfers for farmers could be helpful and farmer-producer organisation (FPO) can play a role in tackling the problem.
"Collectively, they (banks, states and the Centre) have to do more to increase the flow of credit to agriculture sector", he said.
Asked about the transmission of the repo rate cut by the Reserve Bank of India in rates to borrowers, Mr Kumar said home loans for SBI customers were linked to repo-linked lending rate (RRLR), which had already been slashed from 8.5 per cent to 7.65 per cent.
"SBI had also reduced the marginal cost of funds based lending rate (MCLR) from 8.55 per cent to 8.25 per cent. More reduction was not possible", he said.
Responding to a query, Mr Kumar said that the bank's asset-liability committee would decide whether more loan categories could be linked to RRLR.
In the first quarter of the current fiscal year, he said the bank's fresh slippage was high at Rs 16,000 crore.
"Slippages will be brought under control", Mr Kumar said. Talking about the multi-level consultations, he said the feedback would be taken into the parameters such as credit growth, infrastructure financing, digital transaction and CSR initiatives.
"We are also trying to do some kind of performance audit at the branch level through these meetings with the managers.
Today's meeting is at the intra-bank level," Mr Kumar said. He said this initiative is aimed at connecting the role of the banking sector in making India a $5 trillion economy.
The next meeting in this regard would be at the state level on August 23 and 24 under the convenorship of United Bank of India (UBI) where inter-bank comparisons would be discussed.
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