MUMBAI: State Bank of India (SBI) chairman Dinesh Khara has said he does not see any serious challenge on the deposit growth front, adding that even with slowing liabilities addition, the bank has been booking stronger asset growth.
The statement comes amid concerns expressed by the Reserve Bank of India (RBI) and the government over the slowing deposit growth. Governor Shaktikanta Das has flagged the issue four times while the finance minister met the heads of public sector banks last week and asked them to devise innovative methods to woo depositors back to the bank counters.
According to the latest RBI data, while credit growth slowed down to 13.8 percent for the last fortnight, deposit accretion slowed further to 10.3 percent.
“We are in a position to support our loan book growth well and so long as we can do that, I don't think we have any challenge,” he told reporters on the sidelines of an ICAI event here Friday.
In the first reporting quarter of the current fiscal, SBI recorded an 8.18 percent on-year growth in deposit at Rs 49.02 trillion, compared to Rs 45.31 trillion in the same period last year. However, on a sequential basis, the bank's deposits slipped marginally by 0.29 percent.
Khara, who will be hanging up his boots on August 28 after being in the corner room office for close to four years, further said the bank can support loan growth despite lower deposit growth, attributing it to unwinding investments in government securities, which is currently over Rs 16 trillion.
He also said the bank is unwinding a part of its excess investments in government securities to arrange the required resources to support the loan growth. Banks are holding over 23 percent in SLR as against the regulatory mandate of 18 percent.
While some experts have been opining that money is moving out of bank counters and flowing into higher yielding capital market alternatives, SBI's own in-house researchers last week termed the concerns as a "statistical myth", saying the overall quantum of incremental deposits has been higher than advances since FY22.
Meanwhile, addressing chartered accountants earlier, Khara said strengths in audit and accounts can help deliver export revenue for the country and that the global capability centres model being used by the IT and technology sector can be replicated for the accounting sector as well.