‘Consumption demand likely to be sustained’

In the past 12-15 months, a host of fiscal and regulatory measures have been taken to give a boost to the economy. In this exclusive interview, State Bank of India (SBI) Chairman CS Setty tells Mahesh Nayak and Joydeep Ghosh they led to a flywheel effect on credit growth. Setty believes FY26 could see one more rate cut. Excerpts:

- Mahesh Nayak and Joydeep Ghosh

How have the strong fiscal and regulatory measures to push growth played out for the banking sector, especially SBI? They created a flywheel effect on credit growth, with the outlook upgraded to 12-14% from 11-12%, driven by resilient domestic demand. Rising consumption encouraged corporates to utilise working capital and even consider capital expenditure, while banks fine-tuned underwriting standards and maintained asset quality through digitalisation and availability of data. Together, these factors created an envir