State Bank of India Chairman, Mr. Dinesh Kumar Khara has said that there is a growing demand for credit from the corporate sector and loans worth Rs 5 lakh crores are in the pipeline. Unlike the past few years, when the corporates had sufficient cash surplus on their balance sheet, they have started looking for credit to fund working capital requirements and capacity expansion. Now the corporates have started approaching banks for augmenting their capacity or for working capital purposes. Our un-availed term loan percentage, it has come down from 25 per cent to 18 per cent and when we see the working capital utilization, even that has improved. So, all these are confirming that private sector opportunities are going to be there and SBI will be in a position to create value for the sector.
With regard to Retail Agriculture and MSME (RAM) lending, Khara said, SBI can grow the book at 16 per cent during this year as well despite the high interest rate. SBI reported a 16 per cent growth rate in RAM to about Rs 21 lakh crore during FY24.
We can comfortably grow 16 per cent as far as our RAM book is concerned. We don’t envisage that the interest rate impact will be seen in terms of the quality of the loan book. When we are making assessment for underwriting, we are quite cognizant of the likely interest rate scenario, and the ability of the borrowers to repay loan in time. That is the reason why our RAM book has not witnessed much challenge and we can afford to continue at 16 per cent. Asserting that there is no stress on housing and vehicle loans, Khara said, the gross NPA in the whole retail portfolio is 0.7 per cent. It is nothing but a reflection of our underwriting standards and our ability to pick the right quality business. We are seeing adequate opportunities for us to underwrite mortgage and car loans.
