SBI Chairman Highlights Rs 4 Lakh Crore Credit Pipeline as Private Sector Investment Grows

SBI Chairman Highlights Rs 4 Lakh Crore Credit Pipeline as Private Sector Investment Grows

State Bank of India (SBI) Chairman C S Setty has announced a substantial credit pipeline of Rs 4 lakh crore from Indian corporations, signaling a significant rebound in private sector capital expenditure anticipated for the latter half of the fiscal year. Setty, who recently took over the role from Dinesh Khara, emphasized the strong interest in infrastructure financing, particularly in areas such as roads, renewable energy, and refineries.

In an interview, Setty noted the increasing trend of corporates engaging in brownfield expansion funded by their own resources. However, he pointed out a shift as many companies are now seeking term loans to support these projects. He stated, “We have a robust pipeline, with sanctioned amounts not yet disbursed and additional proposals under consideration, indicating strong corporate demand.”

Setty expressed confidence that private capital expenditure will rise significantly this year, particularly as government spending ramps up following a slowdown due to general elections. He projected that both government and private expenditures will drive capital investments in the second quarter and beyond.

Regarding the potential monetization of SBI's stake in its subsidiaries, Setty indicated that there are currently no plans for divestment. He assured that the bank would evaluate the need for capital infusion if any subsidiaries require it for growth. Recently, SBI infused Rs 489.67 crore into SBI General Insurance, which led to a slight reduction in the bank's stake from 69.95% to 69.11% due to employee stock ownership plans.

Setty also commented on the Reserve Bank of India's stance, suggesting that it is unlikely to lower the benchmark policy rate in 2024 due to ongoing concerns over food inflation. This follows the US Federal Reserve's recent decision to cut interest rates by 50 basis points, a move that may influence central banks worldwide.