Growth likely to revive in coming quarters: SBI chief

KOLKATA: India’s biggest lender State Bank of India (SBI) expects the country’s economy to rebound in another couple of quarters, and its chief says that banks need more funds to be able to provide loans to businesses when the pace of growth eventually quickens.

“Plans are getting off the table, with a number of infrastructure projects being tendered out. Growth should come in a quarter or two,” SBI chairperson Arundhati Bhattacharya said in Kolkata on Sunday. “The government now needs to do some heavy lifting,” she added.

Bhattacharya said that some traction is being seen in sectors such as roads and fertilizers, but the benefits would reflect in banks’ credit books with a lag.

There are talks of a stimulus programme to revive growth in the economy, with the Central government facing the task of balancing expansion imperatives and fiscal rectitude.

Furthermore, state-run banks are in need of cash to drive credit demand, which appears to have tapered in the wake of slowing growth and the overhang of bad loans.

At least seven banks that are under the Reserve Bank of India’s prompt corrective action for high ratio of stressed assets and erosion of capital soon need government support.

However, the country’s largest lender SBI may not need it. “I think we have enough strength to raise the capital that is required,” Bhattacharya said.

She said that the merger of SBI and its associate banks is a deep structural reform and that the bank would deliver positive results in three to four quarters.

Bhattacharya was in Kolkata to inaugurate State Bank of India’s sixth training centre since it began its journey in the eastern metropolis in 1806 as the Bank of Calcutta. The SBI is planning to throw open its new banking personnel training institute for employees of other lenders in India and south-east Asia.

The institute will focus on action-based and result-oriented research and critical capacity building, Bhattacharya said.