Slim credit demand sees PSBs turn focus to mid-sized firms

Large state-owned banks, including State Bank of India (SBI), Bank of Baroda, and Union Bank of India, are shifting their focus to mid-sized corporates amid muted credit demand from large companies.

- ANUPREKSHA JAIN

Large state-owned banks, including State Bank of India (SBI), Bank of Baroda, and Union Bank of India, are shifting their focus to mid-sized corporates amid muted credit demand from large companies. Bankers say lending to mid-sized firms offers higher yields, which will help support margins at a time when they remain under pressure from the Reserve Bank of India's (RBI's) rate cuts.

"In the April-June quarter (Q1) of 2025-26 (FY26), we forgone low-yielding corporate loans. From the second quarter onwards, we plan to focus on the mid-sized corporate segment within the corporate book, which yields comparatively higher returns than large corporations," said a banker at a state-owned bank.