In a recent statement, State Bank of India (SBI) Chairman Dinesh Khara expressed confidence in India's economic trajectory, highlighting conditions that suggest an imminent upshift in real GDP growth.
Khara's remarks came as the bank its results for the quarter ending March 2024.
Khara outlined that robust investment demand coupled with improving business and consumer sentiments are laying the groundwork for a significant upturn in India's real GDP growth.
The SBI expects maintaining a credit growth rate of 14-16% in the fiscal year 2025, with continued momentum expected in both retail and corporate loans.
With the Reserve Bank of India (RBI) projecting a real GDP growth of 7% for the current financial year, Khara emphasized the favorable trajectory of key economic indicators.
He noted that consumer price index-based inflation (CPI) had already tapered to 4.9% in March, a decline from the preceding months' average of 5.1%.
Forecasts indicate further moderation, with CPI expected to decrease to 4.5% in FY25, down from an average of 5.4% in FY24.
Khara highlighted the banking sector's robust performance in FY24, with scheduled commercial banks witnessing a credit growth of approximately 20% and deposits growing at around 13%.
He expects this growth momentum to persist in the current fiscal year.
The SBI reported a notable increase in gross advances by 15.24% in FY24, driven by various sectors including SMEs, agriculture, and retail. Khara indicated that similar growth trends are anticipated in these sectors moving forward.
Regarding expectations for credit growth in FY25, Khara maintained optimism, stating that the bank aims to sustain a growth trajectory of 14-16%.
He pointed to a corporate loan pipeline of Rs 4 lakh crore for FY25, with significant contributions expected from both the private and government sectors.
Khara said, "The bank's commitment to supporting growth across conventional industries and highlighted the multiplier effect of infrastructure spending on overall investment"
Sectors such as batteries, electric vehicles (EVs), and semiconductors are anticipated to drive funding demand in the coming year.
Looking ahead, the SBI anticipates a deposit growth of 12-13% for FY25.
The bank reported robust financial performance in the quarter ending March 2024, with standalone net profit reaching a record high of Rs 20,698 crore, representing a growth of 23.98% year-on-year.
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