Expecting growth in credit pick up by Q2 of 15-16: SBI chairperson

Arundhati Bhattacharya expects rate cut by first quarter

Bhattacharya, chairperson of State Bank of India (SBI), on Monday said that the credit growth hasn't really picked up speed in the country and she expects a turnaround by the second quarter of the next financial year.

In Gandhinagar to launch 'Amul Milk Card', a prepaid smart card for customers which can be used to purchase products at Amul parlours, Bhattacharya said, "Credit growth has not really picked up speed in the country."

"We expect growth in credit to pick up by the second quarter of the next financial year (2015-16)," she said.

Annual credit growth in the banking system fell below 10 per cent to 9.68 per cent in early September 2014 for the first time since October 2009 (9.01 per cent), according to the data shared by banking regulator Reserve Bank of India (RBI).

In an earlier interview with this newspaper, Bhattacharya had indicated the bank's credit growth in 2014-15 might be under 15 per cent.

When asked whether SBI was expecting interest rate cut by RBI in the next round of monetary policy review in early February, Bhattacharya, the first woman to head India's largest bank, said, "We are not expecting any immediate rate cuts. We expect rate cuts only by the first quarter."

In its last policy review in early December, RBI held interest rates steady, and said it could ease monetary policy early next year provided inflationary pressures do not reappear and the government controls the fiscal deficit. The benchmark repo rate (the rate at which banks borrow from the central bank) was left untouched at 8 per cent.