The State Bank of India (SBI) has reiterated its plans to sustain credit growth of at least 15% in the current fiscal year, adding that the company is experiencing increasing demand from retail and corporate borrowers despite rising lending rates.
The SBI saw advances rise by 14.93% to Rs. 29,00 633 crores at the end of the first quarter ending in June. This was a significant uptick from Rs. 25,23,793 crore reported in the same period last year. During this period, the bank’s retail loan rose by 18.58%. On the flip side, corporate advances increased by 10.57% year on year.
Dinesh Kumar Khara, Chairman of SBI, added that the bank is working on launching Yono 2.0, a brilliant and advanced app with many features and functionalities. As part of its objective of driving digital lending, the SBI reported that nearly 96% of the banks’ transactions are executed via alternate channels. He added that registered users on the bank’s YONO app had crossed 5.25 crore, tagging it a significant achievement that has created more value for the bank. He further stated that 75% of the new accounts are created via YONO.
On how the bank plans to maintain a 15% growth, the chairman added that they plan to offer competitive term loans. Not just that, he talked about the underutilization of working capital driving borrowing.
The bank expects its corporate book to grow to at least RS. 2.5 to 3 lakh crore by the end of the year. Adding that, small and medium enterprises are building traction, and the bank plans to explore this window to drive more borrowings.
RBI latest hike and its implications
It should be recalled that the RBI recently raised the repo rate to 5.40%, representing an increase of at least 140 basis points since May 2022. Despite the rise in repo rate, the SBI is optimistic that it will surpass its target for the second quarter.
Speaking on the prevailing economic situation on SBI’s activities, the bank’s chairman added that despite the difficulties brought by covid-19, the government’s massive vaccination program had eased things a bit.
