Now is the time to have confidence and lend across segments: SBI chairman

SBI chairman Challa Sreenivasulu Setty

State Bank of India expects to maintain a credit growth of 14–16 percent in FY26, chairman Challa Sreenivasulu Setty has said, adding there are no asset quality concerns and now is the time to step up lending.

Speaking exclusively to Moneycontrol, Setty said, “With a lot of measures, both in terms of budgetary and monetary policy, we assume and expect that the credit growth will continue at the same pace next financial year.” As estimated, SBI will end FY25 with a 14–16 percent loan growth, he said.

Setty, however, expects the banking system’s growth to moderate to around 11–12 percent in FY26. “SBI may have two percentage points more (growth),” he added.

The chairman is confident that the retail and corporate loan books of SBI will contribute adequately to this growth target for the next fiscal.

“Retail loans have been growing faster than the corporate. I think we are one of the outliers where the corporate growth is also significant,” Setty, who took over as the chairman in August, said.

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In the December quarter, SBI’s corporate book grew by 14.5 percent and the bank had good visibility on term and working capital loan books.

Asked if it was time to be a little cautious, the SBI chairman dismissed the suggestion, saying banks are going through the most benign asset quality cycle. “This is the time to put some confidence in the system and start looking at lending to sectors across agriculture, SME, retail, corporate,” he said.

Setty is confident that if SBI grows at a 12 percent annually compounded rate, it can produce another SBI organically in six years. “We are busy doing our own business internally and organically there is great potential for this organisation,” he said.

Setty also told Moneycontrol that the upgraded version of SBI’s mobile banking YONO 2.0 will be launched by July, attributing the launch delay to several new features.

SBI has devised a new underwriting mechanism, the business rule engine, which enables it to sanction a loan to a SME borrower within 15 – 30 minutes, Setty said. The borrower has to give consent to the bank to access their GST statement and furnish income tax returns and processing is done in minutes. The bank gave Rs 34,000 crore in loans to SMEs under this data-based mechanism, he said.