NEW DELHI: C S Setty, Chairman of SBI, announced that the bank’s mortgage loan portfolio has surpassed Rs 9 lakh crore last month. He is optimistic that growth in the RAM (Retail, Agriculture, and MSME) segment will lead to an overall credit growth of 14% for the current fiscal year.
The RAM segment, which constitutes 67% of the total loan portfolio, has also achieved the milestone of over Rs 25 lakh crore in September.
With the economic growth on the rise, SBI has increased its credit growth target from 12% to 14% for this financial year.
“We have revised our credit growth guidance from 12% to 14%. We anticipate strong growth, especially from the RAM sector, with MSME growing at nearly 17-18% and agriculture and retail around 14%,” he stated in an interview with PTI.
The bank is also experiencing steady growth in gold loans, while unsecured personal loans, referred to as express credit, are projected to demonstrate double-digit growth.
Corporate credit, which had been sluggish, has seen a turnaround with a growth rate of 7.1% in the second quarter.
“Our guidance for corporate credit remains in the lower double digits, indicating that an overall credit growth rate of 12-14% is achievable,” he added.
The Reserve Bank’s recent decision to reduce the key policy rate by 25 basis points will make loans more affordable and stimulate demand for new credit.
Chairman Setty is confident of achieving a 3% net interest margin, despite the RBI’s repo rate cut of 0.25% in December’s policy.
Recently, the Reserve Bank of India (RBI) lowered the repo rate to 5.25% while maintaining a neutral stance, allowing for potential further rate cuts. This reduction follows a six-month pause and aims to bolster growth, which reached a six-quarter high of 8.2% in Q2 of FY26.
Chairman Setty also mentioned that the bank may not require additional equity capital to support credit growth and aims to maintain a capital adequacy ratio of 15% over the next 5-6 years.
“Funding credit growth has never been an issue for us. We sought to strengthen our capital ratios. Our long-term goal is to maintain a CRAR at 15% and a Common Equity Tier 1 at 12%,” he stated.
This Capital to Risk Asset Ratio (CRAR) enables the bank to finance advances exceeding Rs 12 lakh crore, as Setty explained.
“With our current profit rates, if we maintain the same level of profitability for the next 5-6 years, we may not need to raise any capital, particularly concerning CET 1,” he concluded.
