State Bank of India (SBI) is witnessing strong momentum in credit demand across all segments, with healthy corporate loan inquiries now adding to the growth, according to Chairman CS Setty in an interview with Business Standard.

Upwardly Revised Credit Growth Forecast

Setty stated that SBI expects credit to expand by 12-14% in FY26, an upward revision from earlier guidance. This growth is supported by steady retail, agriculture, and MSME lending, along with a notable pickup in corporate borrowing.

View on RBI Policy and Economic Dynamics

Setty noted that the upcoming monetary policy review will be shaped by the interplay between India's robust growth and relatively soft inflation. While the rupee's recent weakness and slower deposit growth have raised market questions, he emphasized that policy rate decisions hinge primarily on the growth-inflation dynamics. The strong Q2 GDP print has shifted expectations toward a rate pause, though food inflation remains a key variable for the RBI.

Credit Demand Across Sectors

The Chairman reassured that the bank is not seeing overheating in any specific sector. Key observations include:

• Retail, agriculture, and MSME portfolios have been expanding at a steady 14-15% for several quarters.
• Corporate credit is now sustaining double-digit growth, driven by improved utilization of working capital limits.
• Increased drawdowns from previously sanctioned term loans signal stronger project activity.
• Early-stage capital expenditure discussions are emerging in sectors like renewable energy, roads, data centers, and refineries.

Outlook on Margins

Setty expressed confidence that effective liability management would help SBI maintain its net interest margin (NIM) above 3% through the current financial year, a level the bank aims to protect.