Deposit-loan gap not posing any challenge: SBI Chairman Dinesh Khara

Mumbai: Amid concerns over the continuing gap between deposit and loan growth, SBI Chairman Dinesh Khara on Friday said it is not posing any challenges for the country’s largest lender as it is able to support the uptick in advances.

The bank is unwinding a part of its excess investments in government securities to arrange the required resources to support the loan growth, Khara told reporters here. It can be noted that for nearly two years, the deposit growth is trailing the credit expansion for the banking system, and SBI has also been seeing the same trends in its business. Some experts have been opining that this is due to flow of savings into higher yielding capital market alternatives, while some like SBI's own researchers also called the concerns a “statistical myth”, saying the overall quantum of incremental deposits has been higher than advances since FY22.

Asked about how concerning the situation is at present, Khara said, “We are in a position to support our loan book growth well. So, I think so long as we can support the loan book growth well, I don't think that we do have a challenge.” To a question on what should the depositors expect from a rates perspective, Khara explained the bank's strategy on resource mobilisation, pointing out that there is little reliance on rates.

He said the bank has an investment book of over Rs16 lakh crore, and is unwinding a part of the excess SLR (statutory liquidity ratio) to support the loan growth. The Chairman, who retires later this month, also made it clear that it is ensuring that the returns on the funds are higher in lending than the yields on investments. To a question on the report by economists, he explained that it tried to capture the time series over a period of time and added that a similar situation existed even in 2003-04. Going by the past experience, it is suggested that there will be a convergence of deposit and credit growth only by June-September 2025, he added.

Meanwhile, addressing chartered accountants earlier, Khara said India's strengths in audit and accounts can help deliver export revenues for the country and added that the global capability centres model being used by the IT and technology sector can be replicated for the same.