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Informist, Tuesday, Sept. 9, 2025

 

NEW DELHI – State Bank of India Chairman C.S. Setty Tuesday said the recent steps taken by the government and the Reserve Bank of India should provide confidence to corporates on sustained consumption demand. This, he added, should push companies to increase capital expenditure.

 

"I believe that everybody is waiting for a sustained domestic consumption to come back, and hopefully the measures the government is taking, the RBI is taking in terms of ensuring adequate liquidity, and interest rate reduction, they all should play out in terms of providing this confidence to corporates that consumption is here to stay," Setty said at an event organised by the All India Management Association in the national capital.

 

"Most of the corporates are operating at 75-80?pacity utilisation. This is actually the time to go for expansion. They are just looking at if sustained demand comes back," he said.

 

The GST Council last week decided to overhaul the tax regime by tweaking the four-slab GST structure of 5%, 12%, 18%, and 28% to a two-slab structure of 5% and 18%. The council also introduced a new GST rate of 40%, to be imposed on "sin" and luxury goods. All new rates, except for those on tobacco products, will take effect Sept. 22.

 

The changes to GST come months after the central government announced large income tax breaks, including no tax on personal income of up to INR 1.2 million. The government's steps, along with the 100-basis-points cut in the repo rate by the RBI's Monetary Policy Committee in 2025, are expected to boost consumption demand.

 

Setty said SBI's corporate capital expenditure loan pipeline is very strong, with demand from public-sector refineries, data centres, and electric vehicle sector. The core sectors are yet to invest with "hardly any major investment" in the steel and cement sectors, he said. SBI has INR 3.5 trillion worth of sanctions and INR 3.5 trillion of disbursements in the pipeline, Setty had said in August.

 

The SBI chairman also said that banks are in a good position to fund mergers and acquisitions. Last month, Setty said that SBI has asked the RBI to allow banks to fund the acquisition of companies.

 

"It is not that M&As are not happening. It is just that it is not being funded by Indian banks. It is not appropriate," Setty said. To start with, banks can be allowed to fund mergers and acquisitions of public-listed companies where the acquisitions are more transparent and are approved by the shareholders, Setty said.

 

"Today, while banks are in a good position to fund M&As, the corporates themselves are sitting at Rs 15 lakh crore (INR 15 trillion) of cash, which means that they would definitely look for an opportunity to acquire something through a combination of equity and debt. So I think we are all in a position to fund that."

 

SBI reported a net profit of INR 191.60 billion for the June quarter, up 12.5% on year and 2.8% sequentially. Shares of the bank Tuesday ended flat at INR 808.85 on the National Stock Exchange.  End

 

Reported by Shubham Rana

Edited by Ashish Shirke

 

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