SBI chairman wants stronger growth in retail lending says huge demand more headroom to grow

MUMBAI:SBI chairman Arundhati Bhattacharya has dismissed speculation that there could be a bubble in retail loan segment. She said speaking at a seminar that retail loans is still less than 10% of the country's GDP, which is far lower than other developing countries, hence there is more room to grow.

Speaking at a seminar, the chairman of the country's largest bank added that though consumption loans were picking up it was not headed towards a moment of bubble because there was ample headroom available for growth.

"There is unmet demand for credit in the system which needs to be met by extensive use of data analytics and by going digital," said Bhattacharya.

Commenting on the possibility of rates coming down in the future under the new RBI governor Urjit Patel, Bhattacharya said, "Lending rates will remain a function of both credit demand and liquidity. Demand will play a big role for rates to come down."

While Nandan Nilekani feels that it is the Whatsapp moment for the Indian banking industry Bhattacharya said that it will take another two years for banks to lend seamlessly on the basis of data analytics.

"It is India's demographics which will cause it to take a bit more time for loans to be disbursed on the go, but Aadhaar has been a big enabler on that front," said Bhattacharya."We are asking credible players in the area like National Thermal Power Corporation, Tata Power to come in for overseeing and management of stressed enterprises," said Bhattacharya.

State Bank of India