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Informist, Friday, Jul 19, 2024

 

--SBI Khara: We are mindful of growing our deposits

--SBI Khara:New renewable projects show we are on right track to growth 

--SBI Khara: Encouraging corporates for green lending 

--SBI Khara: 500-bln-rupee book already created for green lending 

--HDFC Bk Mistry: Bks running short on deposits is a temporary phase 

--HDFC Bk Mistry:Expect something in the Budget for affordable housing 

--HDFC Bank Mistry: Room to cut interest rate by end of FY25 

--IDFC FIRST Bank MD: Building modern IT infra stack is our focus 

 

MUMBAI – The State Bank of India is mindful of growing its deposit base, its Chairman Dinesh Khara said today. "As far as it (deposit growth) is related to interest rates, we review the position from time to time, and depending upon the gaps, if we feel we need to be in line with the market, we'll do some kind of calibration," Khara said at the Financial Express BFSI Summit here. 

 

SBI recently introduced a special term deposit offering 7.25% per annum on a tenure of 444 days. 

Khara's comments come amid concerns about credit growth exceeding deposit growth. Speaking at the same conference, Reserve Bank of India Governor Shaktikanta Das today cautioned that skewed credit-deposit growth could put financial system liquidity at risk and said credit growth should not outpace deposit growth by miles.

 

"Deposit mobilisation has been lagging credit growth for some time now. This may potentially expose the system to structural liquidity issues," Das said. As per the latest RBI data, bank loans were up 13.9% from a year ago as of Jun 28, compared with 11.1% growth in bank deposits.

However, HDFC Bank's Non-Executive Director Keki Mistry said banks running short on deposits is just a temporary phase.

 

Mistry, who spoke at the same conference, said there was room for the RBI to cut rates before March. 

 

"Monsoons are good this year. Hopefully, food prices will also come down. There is no geopolitical issue at the moment. I mean it's been continuing for the last two years. There's nothing additional that is happening. Oil prices are not suddenly spiking. So, there is room in my view before the end of the financial year to perhaps look at the interest rate cut," Mistry said.

 

Interest rates are a function of global interest rates plus local inflation and so many considerations go into whether to reduce interest rates, he added.

 

Asked about the Budget for 2024-25 (Apr-Mar), which will be presented on Tuesday, Mistry said he expects the budget to revolve around the pillars of growth, employment, consumption, rural economy, manufacturing and fiscal discipline.

 

"We have done extremely well on growth compared to other countries... the government and RBI have done fantastic jobs and this growth momentum should continue," he said. 

 

Zarin Daruwala, chief executive officer of India and South Asia Markets at Standard Chartered Bank, said she expects the government to keep refining the production-linked incentive schemes.

 

GREEN DEPOSITS

Khara said SBI has recently requested the Reserve Bank of India to lower the cash reserve ratio on green deposits to make them more attractive. "This move will give some kind of elbow room for the banking system to pay a little more," Khara said.

 

Green depositors expect a little more in terms of interest rates from banks and when it comes to green lending they expect a little lower in terms, Khara said, suggesting that current deposit rates for green deposits are not attractive enough.

 

Though SBI does a little bit of calibration, changes have to be made at the industry level, Khara said. Currently, the bank has a 500-bln-rupee green lending book, the SBI chairman said.

 

Khara also said the government's push for renewable energy projects shows that India is on the right track. "I think it (renewable energy) is going to be another major game changer. It is actually a new level of growth which we get to see in our economy, and it is moving very fast," Khara said.

 

CYBER-SECURITY

Discussing issues relating to cyber-security, IDFC First Bank's Managing Director V. Vaidyanathan said it is a serious threat and investments need to go there.

 

"We at our bank, are investing in building a top-of-the-world stack here. And that is our focus. And with a really good technology stack, people who have experienced a bank app, for example, can now almost see a big difference in,
in terms of experience," Vaidyanathan said.  End

Reported by Sachi Pandey and Kshipra Petkar

Edited by Saji George Titus

 

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