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Informist, Wednesday, Jun. 3, 2026

 

--SBI Setty: Have seen no change in loan mix after West Asia war started 

--SBI Setty: Strong growth in loan sanctions; disbursements yet to happen

 

NEW DELHI – State Bank of India Chairman C.S. Setty Wednesday said that India's largest lender has been seeing robust loan growth across sectors in the June quarter despite the headwinds expected from the West Asia war. However, as a portion of these loans has only been sactioned so far and not been disbursed yet, the final impact on credit demand is yet to be seen, he said on the sidelines of the Citi India Conference 2026 here.

 

In his remarks at the conference, Setty said that despite the war, there was no pullback of capital expenditure in India yet. He also said the government had been proactive in providing fiscal support to affected sectors, particularly through the Emergency Credit Line Guarantee Scheme 5.0, which backstops some loans to micro, small and medium enterprises.

 

"Some of the ELCGS tapping, that may be borrowing for survival," Setty said, referring to the government's scheme. "But the rest of our loan mix has not changed, there is strong demand in SME (small and medium enterprises), retail, corporate..."

 

SBI is working on taking advantage of new opportunities provided by the Reserve Bank of India's recent norm changes, Setty said. The largest domestic lender is working with Citi and other foreign banks on projects such as acquisition financing, for which the RBI brought out draft directions in February. The bank chief reiterated that he sees no change to the SBI's capital adequacy from entering these new business verticals, reiterating remarks he made following the March quarter earnings.

 

Setty also expects subsidiary SBI Asset Management Co. to list on exchanges in 2026 after regulatory approval. The state-owned lender's asset management arm filed a draft red herring prospectus with capital markets regulator Securities and Exchange Board of India in March. SBI and its parner Amundi have planned an offer for sale of up to INR 130 billion through the stake sale.

 

As for the upcoming rate decision of the RBI's Monetary Policy Committee, Setty expects the rate-setting panel to maintain status quo on the repo rate at 5.25%, he said on the sidelines. Nineteen out of 24 economists in an Informist poll expect a status quo on the repo rate. The remainder expect the MPC to raise the repo rate to deal with inflationary pressures emanating from the West Asia war and a deficient monsoon.  End

 

Reported by Aaryan Khanna

Edited by Avishek Dutta

 

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