₹2.5 trillion of corporate loans in the pipeline, says SBI chief

State Bank of India has ~2.5 trillion worth of corporate loans lined up, Chairman Dinesh Kumar Khara said on Wednesday, adding that the banking system was currently much better placed in terms of risk assessment.

“Today, it’s not merely the equity but the colour of the equity which has improved,” Khara said, referring to learnings incorporated by the banking system from the previous cycle of strong loan growth and a subsequent build-up of bad assets for banks. He was speaking at the SBI Banking and Economic Conclave.

“I would say that from the infrastructure point of view, the banking system is much better placed. They can assess the risks much better and are better equipped in terms of capital. So, I think all put together gives the impression that today the banking system is much better placed and probably the kind of growth which we are seeing is sustainable,” he said.

Khara said up to 95 per cent of SBI’S corporate balance sheet was provided for. “The growth is coming at a time when corporates are deleveraged. That also gives us the confidence that the path which we are treading is sustainable,” he said.

“The ecosystem in terms of strengthening the ratings system, GSTN has given us credible data to evaluate the risk better. The banking sector has the benefitted of leveraging all these ecosystems,” he said.

‘‘ THE GROWTH IS COMING AT A TIME WHEN CORPORATES ARE DELEVERAGED. THAT ALSO GIVES US THE CONFIDENCE THAT THE PATH WHICH WE ARE TREADING IS SUSTAINABLE DINESH KUMAR KHARA

SBI Chairman

In response to a query regarding the wide gap between bank credit growth and deposit growth — and the subsequent need to mobilise funds — Khara said liquidity in the banking system had improved in November on account of government spending.

The latest RBI data showed that as on November 4, credit growth was at 17 per cent year-on-year, while deposit growth was at 8.2 per cent.