The Hindu Business Line : SBI gearing up to meet credit demand

State Bank of India, which foresees a stable interest rate scenario in the near term with an upward bias, is readying for a busy season when credit demand is expected to pick up.

The country's top banking institution, being aware that recent months have already seen a huge spurt in the demand for credit, is preparing to deploy large quantities in major areas of infrastructure — power, roads and airports.

The SBI Chairman, Mr A.K. Purwar, who was addressing members of Bharat Chamber of Commerce on Saturday said that SBI will urge corporates to prepare themselves for a possible rise in rates.

Good companies will nevertheless, try to bring down interest rate costs (as part of their overall costs) in various innovative ways.

SBI does not visualise a scenario marked by a shortage of resources, despite the probable rise in credit requirement, it is pointed out. "Credit growth is well-diversified. We have rarely seen such diversification," Mr Purwar mentioned, adding that besides infrastructure, the farming and the SME segments are also throwing up significant demand for the lending community.

Referring to overseas acquisitions by Indian corporates, the SBI Chief felt that the local entrepreneurs have turned to international markets in a big way.

Companies are ready to acquire assets abroad, a trend that is reflected in recent moves by players like Bharat Forge.

Mid-sized corporates too are waiting for the right opportunities on this front.

More acquisitions

The domestic corporate sector needs to become even more aware of international perspectives. It is time to look at more exports - not only for the services industry but also for the manufacturing segment.

The bank, which has also started looking at international markets in a big way, has already acquired a few small entities. Its efforts in this direction are likely to continue in the coming days, it was pointed out.

Infrastructure projects

Infrastructure development projects, some of them quite large in scale, in urban areas will result in a major demand for credit in the coming days, Mr Purwar said. Among these projects will be some that relate to water management — an area that will assume greater importance in future. "Urban infrastructure will be a big area," he said, adding that SBI will have to be ready to tap the opportunity.

Some of the other areas that are expected to draw the bank's attention are healthcare and hospitality, both of which are showing signs of resilience.

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