Arundhati Bhattacharya, who ends four years at the helm of the State Bank of India (SBI) on Friday, said reviving lending in the country was one of the major tasks left unfinished.
India’s state banks, including market leader SBI — the country’s largest — have battled rising bad loans in recent years, a fight that has dampened credit growth and slowed a long-awaited economic revival.
“Even today credit growth is not where we wanted it to be,” Bhattacharya, the first woman to have led the over 200-year-old bank, told reporters on her last day in office. “So that’s an unfinished agenda. And I think the incoming chairman has already stated it will be his agenda to take that forward.”
Total bank loans in India grew just about five per cent in the year to March, the slowest pace in more than six decades. Latest central bank data showed an annual growth of 6.8 per cent for the two weeks to September 15, an uptick but still far slower than the mostly double-digit growth seen this decade.
Policymakers have said credit growth was vital for reviving economic expansion in Asia’s third-biggest economy where banks are the major source of funding.
The public sector lender has guided for a loan growth of between six per cent and eight per cent for the current financial year to March.
Bhattacharya predicted better days ahead for the bank after a spike in sour debt in the June quarter due to a merger of its five subsidiaries with it.
“My promises were that you will see better numbers going forward and we will stick to those promises,” she said.
Shares of the SBI closed 2.1 per cent higher at ~256.65 on the BSE, outperforming the broader market’s 0.9 per cent gain. She also cited a big digital upgrade project the SBI is undertaking as another unfinished agenda. The project which was to be over by July has been delayed as its scope was expanded, Bhattacharya said, hoping for it to be delivered in a month or so.
Bhattacharya, who would be replaced by colleague and banking veteran Rajnish Kumar, said she was not looking to take up another position in the banking industry.
“I don’t think I will continue in the area of banking. But obviously I am not going to just hang up my boots.”