Chairman C S Setty of the State Bank of India emphasized on Wednesday that the corporate bond market requires strengthening. He also confirmed that the banking industry’s exposure to small loans is manageable, primarily due to the active involvement of NBFCs and MFIs.
Setty also addressed concerns about the slowdown in unsecured loans and the importance of maintaining a healthy CASA (current and savings account) ratio while speaking on the sidelines of the annual financial market conclave of the Bengal Chambers of Commerce and Industry.
One of the primary points of corporate lending is that it was primarily conducted by banks. Setty stated that the corporate bond market must be further fortified.
“I think these financial services players were also significant players in mobilizing the household deposits, and have to come to the market,” according to him.
Setty stated that the banking industry does not provide small value loans, as these loans are provided by NBFCs and MFs. She also mentioned that there is a slight slowdown as a result of the increased credit risk weight.
However, I believe that the increase in unsecured small loans is “not that alarming,” he continued.
He emphasized that the slowdown in retail unsecured credit has been facilitated by the increase in credit risk weight. “We believe that our CASA ratio will be protected at this level,” according to Setty.
Setty previously stated during a panel discussion that “the government has also shifted toward efficient cash management, and corporations have now adopted it.” This implies that the float funds will not be accessible.
Additionally, he stated that the SBI’s dream run was alive and well and is anticipated to persist.
The SBI chief stated that deposits must be provided upfront and that other institutions must access the market for financing to stimulate deposit growth.
