The regulator has a clear view on riskier segments: if growing faster, temper it down: SBI’s Ashwani Kumar Tiwari

The increase in risk weights on unsecured loans in November 2023 and the draft circular on project loans for lenders sends a clear signal - temper down growth, says State Bank of India’s Managing Director Ashwani Kumar Tiwari.

“By placing some restrictions or risk rates on slightly faster growing segments and riskier segments, like unsecured loans and then the draft circular on project finance, the signal is that if these segments which are riskier are growing faster, then you have to actually temper it down. That is the larger signal,” Tiwari said at the Global Fintech Festival in Mumbai on August 28.

Speaking on the lagging deposit growth in the Indian banking system, Tiwari said that the same is expected to come in line by next year.

“Deposit growth has relatively slowed down and this has been flagged by the RBI also. And therefore, banks have been trying to do various things like raising deposit rates, reaching new segments digitally like hospitals, medicals. And banks are also raising liabilities through T1 bonds and other corporate bonds. It will be corrected sometime next year,” he added.