State Bank of India, India’s largest bank, is set to achieve a loan growth of 14–15 per cent in the upcoming fiscal year, surpassing the country’s GDP growth rate, as per Chairman Dinesh Khara. This optimistic outlook is backed by the association of growth with the GDP, with a nominal GDP growth estimated at 7.5 per cent and inflation at 5.5 per cent, making the projected growth for FY25 achievable for SBI.

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Strong Sentiments

In response to inquiries about the macroeconomic environment supporting these projections, Khara emphasized India’s leading position in terms of growth opportunities compared to other economies. He highlighted the country’s ability to address supply-side issues coupled with a positive inflation trajectory. The Chairman expressed confidence in the growth factors remaining intact, especially with the infrastructure developments and liquidity maintenance amid the ongoing pandemic challenges.

Return of Private Capex

A significant factor contributing to the positive sentiment is the increasing pace of loan utilization by Indian companies, indicating a shift from commitments to actual investments. While acknowledging the reduced dependence on bank borrowings by the private sector due to improved cash flow visibility, Khara reiterated the availability of a loan pipeline and decreasing unutilized loans at SBI.

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Addressing varying opinions on growth prospects, including reports like Goldman Sachs’ assessment, Khara maintained a positive stance, suggesting that a closer perspective offers a clearer view of the situation than distant observations. He indicated that the actions and initiatives taken locally have positioned SBI well for sustained growth despite external evaluations.

“At our bank, unutilised loans are coming down. Also, there is a pipeline available for us. This clearly means that the commitment is getting converted into sanctions and sanctions are getting converted to utilisation”
Dinesh Khara,
Chairman, State Bank of India