SBI one of the largest spenders on tech: Setty

CS Setty, chairman of State Bank of India (SBI), in conversation with Tamal Bandyopadhyay on Wednesday, discussed the slowdown in credit growth, the Reserve Bank of India's (RBI's) reforms, and the potential impact of allowing private sector professionals into public-sector banks (PSBs). Edited excerpts:

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Why is credit growth not picking up?

■ We're not lacking in credit growth. If you look at the RBI data, credit is growing in double digits-which, in my view, is quite reasonable. There's significant growth in micro, small and medium enterprise (MSME) credit. Today, banks are more confident about lending to MSMEs because of better data availability and greater clarity in business models.

There's also strong credit demand from the agriculture sector. Both MSME and agriculture are growing at 16-17 per cent. On the retail side, mortgage growth remains healthy. The only segment lagging is corporate credit.

Corporates now have multiple funding sources beyond banks, and many are sitting on large cash reserves. When they do take up capital expenditure (capex), they prefer to use their own funds first. Private capex alone can't rely on bank credit. Both the government and banks want private investment to return in full force.

Many companies are already operating at higher capacities-technology now allows them to run at about 90 per cent utilisation. Global and supply chain disruptions, along with tariff issues, have created some uncertainty, but private capex will come back soon. This economy is driven by domestic consumption, and once that demand stabilises, capex will pick up.

Are banks facing challenges in mobilising deposits?