The increase in credit risk weighting has contributed to the slowdown in unsecured retail lending, he stressed. “We believe our CASA ratio will be protected at this level,” Setty said.
State Bank of India Chairman CS Setty on Wednesday stressed the need to strengthen the corporate bond market, though he said the banking industry’s exposure to small loans remains manageable, mainly due to active participation of NBFCs and MFIs.
Speaking on the sidelines of the annual financial market conclave of the Bengal Chambers of Commerce and Industry here, Setty also addressed concerns over the slowdown in unsecured lending and the importance of maintaining a healthy CASA (current and savings account) ratio.
“One of the most important points about corporate lending is that it was mainly provided by banks. The corporate bond market still needs to strengthen,” Setty said.
“I think these players in the financial services sector were also important players in mobilizing household deposits and they need to come out into the market,” he said.
Setty said the banking industry is not into small value lending like that provided by NBFCs and mutual funds, adding that there is some slowdown due to rising credit risk burden.
But I think the rise in small, unsecured loans “is not that alarming,” he added.
The increase in credit risk weighting has contributed to the slowdown in unsecured retail lending, he stressed. “We believe our CASA ratio will be protected at this level,” Setty said.
Speaking at a roundtable discussion, Setty said, “Businesses have moved towards efficient cash management and the government has also moved towards efficient cash management. This means that reserve funds will not be available.”
He also said that SBI’s dream is not over and is expected to continue.
Stating that deposits have to be prioritized, the SBI chief said other institutions need to look to the market for funding to boost deposit growth.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 18, 2024 | 21:51 IS
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