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Informist, Friday, Aug. 7, 2026

--SBI Setty: Deposit space has become extremely competitive 

--CONTEXT: Comments from SBI Chairman CS Setty in post earnings analyst call 

--SBI Setty: Have potential to grow fee income to 20% of total income 

--SBI Setty: SBI General Insurance next arm to be up for listing 

By Kabir Sharma and Shweta

MUMBAI – State Bank of India Chairman C.S. Setty said deposit mobilisation has become "extremely competitive" as lenders chase liabilities, adding that the country's largest lender will not aggressively bid for expensive wholesale deposits and instead continue to rely on its strong retail franchise to protect margins.

Speaking at the bank's post-earnings analyst call, Setty said SBI also sees significant scope to expand fee income, targeting an increase in its share to 20% of total income from around 15% currently, while indicating that SBI General Insurance is the next group company likely to be listed, though without committing to a timeline. 

"Deposits have become an extremely competitive landscape and a lot of wholesale deposit rates have gone up, which is not the rate which we are willing to pay," Setty said. He noted that retail term deposits continued to grow 14% year-on-year, while savings bank balances rose 10%, making SBI "probably an exception" in posting current account savings account growth despite industry-wide pressure.

The chairman said the bank's substantial excess statutory liquidity ratio holdings and recent foreign currency non-resident (bank) deposit inflows have reduced the need to raise costly bulk deposits. He reiterated that bulk deposits are managed as a treasury activity, with the bank choosing the most economical funding source available.

On fee income, Setty said the bank had "a long way to go" compared with peers and believed fee income could eventually account for 20% of overall income. He said SBI was focusing on loan processing charges, transaction banking and other fee-generating businesses. Growth in government-related fee income during the quarter was partly due to an accounting change under which certain cash management revenues are now recognised on an accrual basis, while the remainder came from business growth, particularly in the railway segment. 

Setty also reaffirmed the bank's full-year domestic net interest margin guidance of around 3%, saying the lender was not providing quarterly guidance and remained comfortable with its annual outlook.

On subsidiary value unlocking, Setty said SBI General Insurance remains the next likely candidate for a public listing after the successful listing of SBI Funds Management, but stressed that no timeline has been finalised. "I am still saying that SBI General is the next candidate for listing, but no timeline," he said. 

Addressing concern over the asset quality, Setty said the rise in fresh slippages during the June quarter was seasonal and should not be a cause for concern, noting that the bank had already recovered around INR 14 billion-INR 15 billion of the approximately INR 70 billion slipped accounts. He added that there were no significant concerns regarding gross or net non-performing assets or special mention accounts. 

The chairman said SBI had mobilised about $6 billion in FCNR(B) deposits so far, along with a $1 billion overseas fundraising and $300 million of external commercial borrowings. The bank expects total FCNR(B) mobilisation to reach about $10 billion, although it does not view this as a formal target and believes inflows could exceed that level depending on customer demand. 

On lending, Setty reiterated SBI's FY27 credit growth guidance of 14-15%, saying the current 18% growth reflected a favourable base effect and that the bank's outlook remained anchored to nominal GDP growth.  End

US$1 = INR 95.21

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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