Country’s largest lender State Bank of India (SBI) today said it expects to register a lower loan growth rate of 16 per cent for the current fiscal as the demand for advances from the industrial sector is “weak”.

“...we would like to believe that the loan growth should not be above 16 per cent and deposits growth between 14 and 16 per cent (in 2013-14),” SBI Chairman Pratip Chaudhuri said here today when asked about his projections for the ongoing fiscal.

“...we feel the loan environment is rather weak and hardly any demand in the industrial sector so whatever loan demand is coming is from consumer sector,” he said.

He also attributed the expectation of lower growth in advances to the increasing demand from corporate sector opting for dollar loans.

“Dollar loans are becoming cheap. Many corporates who are thinking of long-term loans for their projects increasingly prefer dollar loans. Dollar loan pricing is going down every year but rupee loan pricing is not going down. Demand for rupee loan from corporate sector is weak. Therefore, we are pegging (loan growth) at 16 per cent,” he said.

Last fiscal, SBI posted 21 per cent and 15 per cent growth in advances and deposits, respectively.

Chaudhuri said the bank would announce its financial results on May 22.

Published on May 9, 2013