SBI has slowed down unsecured retail loans: Chairman

While overall loan growth remains robust, State Bank of India, the nation’s largest lender, focuses on “healthy” expansion by curbing unsecured retail loans.

Key Takeaways:

• SBI deliberately slowed down unsecured loan growth from 30-33% to 18% to avoid unhealthy expansion.
• The move follows RBI’s increased risk weights on such loans, aiming for sustainable growth in the sector.
• Despite the slowdown, SBI expects overall loan growth to reach 14-15%, driven by healthy corporate credit demand.
• A strong loan sanction pipeline of Rs 4.7 trillion from corporates bodes well for future growth.

Main Points:

• SBI Chairman Dinesh Khara emphasizes the importance of healthy growth over aggressive expansion in unsecured loans.
• The increased risk weights by RBI necessitate capital adjustments, but the impact on SBI will be marginal at 0.70 basis points.
• While retail has been the engine of credit growth, corporate loans are picking up pace, with a promising Rs 4.7 trillion sanction pipeline.
• Khara highlights the significance of corporate investment commitments, pointing to Rs 35 trillion pledged in FY 2022-23, indicating future loan book expansion.