ANISBI Chairman C S Setty (file photo)
Private Investment Rebound After Tariff Disruption, Asserts CS Setty, Chairman of SBI
State Bank of India (SBI) Chairman Challa Sreenivasulu Setty is optimistic that private investment will experience a broad-based rebound once the disruptions caused by U.S. tariffs stabilize. In an insightful interview with ET’s Deepshikha Sikarwar, held during the World Economic Forum in Davos, Setty highlighted several key points regarding the banking sector and SBI’s strategic focus.
SBI’s Growth Strategy and Focus Areas
– Interconnected Growth: Setty believes that SBI’s trajectory is closely tied to India’s overall economic growth, consistently outpacing the nominal GDP by 2-3 percentage points.
– Aim for Balance Sheet Growth: The bank aims for a growth rate of 11-12% on its balance sheet. As Setty puts it, We are essentially adding a bank’s worth of business every six years.
– Technology Utilization: SBI is prioritizing the harnessing of technologies, particularly artificial intelligence, to enhance operational efficiency and boost productivity across its branches.
Aspiration to Join the Ranks of Top Global Banks
Setty outlines that SBI’s strategy encompasses:
– Micro-Market Adaptations: Understanding specific needs in various micro-markets, whether relating to products, processes, or technology, is crucial.
– Branch Expansion: There remains an opportunity to increase physical presence in areas currently underrepresented.
Consolidation in the Public-Sector Banking Space
– Potential for Consolidation: Setty sees room for further consolidation within public-sector banks but emphasizes that decisions on mergers are ultimately made by the government.
– Organic Growth Over Inorganic: Unlike some competitors, Setty believes SBI can achieve its growth organically, with a current growth rate of 10-11%, adding approximately Rs 10 lakh crore in business annually.
Interest Rate Trends and Their Impact
– Rate Cut Forecast: According to Setty, a pause in interest rate cuts is anticipated in February, which may help maintain exit margins by March 31, 2026.
– CASA Deposits: While savings accounts are stable, current account balances—primarily reliant on government funds—need strategic focus due to shifts in cash management practices.
Conclusion
As the conversation around the future of private investment unfolds, CS Setty’s insights underscore SBI’s proactive approach towards growth and technological integration. With the potential for a rebound in private investment and strategic focus on both organic growth and efficiency gains, SBI is poised to play a vital role in the evolving banking landscape. The path forward is promising, with Setty’s vision aligned closely with both national economic goals and the bank’s aspiration to be among the top 20 global banks.