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Informist, Saturday, Feb. 7, 2026

 

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--SBI Setty: Remain mindful of shift of household saving to fincl markets
--SBI Setty: Need more depth in debt capital markets 
--SBI Setty: Deposits will remain primary source of funds for banks 
--SBI Setty: Believe trade deals really positive for Indian economy 
--SBI Setty: FTAs to provide more cross-border opportunities for us 
--SBI Setty: Will access the bond market in FY27, not in FY26 
--SBI Setty: Hold excess SLR worth INR 3.4 tln 
--SBI Setty: Some customers shifting from express credit to gold loans

 

MUMBAI – State Bank of India Chairman C.S. Setty said the bank is closely watching the structural shift of household savings toward market-linked instruments, even as deposits will continue to remain the primary source of funding for banks, and called for deeper domestic debt capital markets to support future credit growth.

 

Speaking at a press conference after the bank declared its December quarter earnings, Setty said the increasing financialisation of savings is a structural trend that will reshape bank balance sheets over time, and requires lenders to diversify funding sources and strengthen liability strategies. "We remain mindful of the structural shift in the financial system, particularly the increasing financialisation of household savings toward market-linked instruments," Setty said, noting that while the trend is positive for capital markets, it presents a challenge for deposit mobilisation for banks.

 

However, Setty said despite this shift, traditional deposits will continue to anchor bank funding. "Banks, for some time to come, will definitely depend on deposits to build their assets," he said, adding that SBI is repositioning branches as deposit mobilisation units rather than transaction-only centres.

 

Setty underscored the need to develop India's debt capital markets further so that banks can access bond funding more efficiently as savings increasingly move into mutual funds, insurance and pension products. "We need to have a debt capital market where the bond market will become much deeper. Banks will be able to access the bonds — if not lower than deposit cost, at least equivalent to deposit cost," he said. A deeper bond market would give banks greater flexibility in structuring their balance sheets and supporting credit growth, he added.

 

Reflecting this stance, Setty said SBI does not plan to tap domestic bond markets in the current financial year but expects to do so next year. "We will access the bond market next year. This year we will not be able to access the market — it is too short now before the financial year-end", he said, indicating planned bond market access in 2026-27 (Apr-Mar) rather than FY26. He added that overseas bond issuances will continue to be used mainly to fund overseas books rather than domestic credit.

 

On liquidity buffers, Setty said SBI remains well positioned, with surplus statutory liquidity ratio holdings providing additional headroom. "We have INR 3.4 trillion worth of excess SLR," he said in response to a question on liquidity and balance sheet flexibility. He reiterated that the bank's capital and liquidity ratios remain comfortably above regulatory requirements and can support projected credit growth.

 

Setty described recently concluded and prospective free trade agreements as a strong positive for the Indian economy and for bank credit demand across segments. "I think these trade deals are extremely positive to the economy," he said, referring to agreements with the European Union, the UK, Oman, New Zealand and the US. He said the removal of tariff overhang and diversification of export markets would benefit corporates as well as micro, small and medium enterprises. "FTAs will provide more cross-border opportunities for us," Setty said, adding that SBI is well placed through its overseas presence to support Indian companies expanding into new markets.

 

On retail lending trends, Setty said SBI is seeing a modest shift in borrower preference from unsecured personal loans under its express credit product toward gold loans, mainly due to lower interest rates and higher eligible loan amounts against collateral. "Some movement is also happening with the gold loans," he said. "It may not be significant, but some of the people who would have otherwise taken express credit believe that gold loan is a better option — you have lower rate and higher amount of loan available."

 

Setty said SBI is recalibrating its branch and digital strategy to address the deposit challenge, with a stronger focus on retail term deposits and savings account mobilisation, supported by digital migration of routine transactions.

 

He added that while financialisation will continue, household portfolios will still retain a deposit component, and banks that actively mobilise deposits through branch networks and digital channels will remain competitive. "Our approach is forward-looking — anticipating change rather than reacting to it," Setty said, adding that SBI is aligning its funding and product strategy with evolving savings behaviour.  End

 

Reported by Kabir Sharma and J. Navya Sruthi 

Edited by Deepshikha Bhardwaj

 

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