SBI may lower credit growth to 18%: Bhatt

Stung by slow credit offtake in the first half, State Bank of India (SBI) may revise its loan growth and bring it down to 18 per cent for this fiscal.

"I think we will do that (revising and bringing down the loan growth from earlier estimated 20 per cent). I have been saying it is difficult to achieve that. But if it picks up after Diwali otherwise we may have to revise," SBI Chairman O P Bhatt told PTI.

It would be 18 per cent from 20 per cent for the current fiscal, he said.

On an annual basis, he said, the credit growth of SBI has been 19 per cent in 2010-11.

As per the RBI data, the total outstanding credit of the banking system has gone up just 5.6 per cent to Rs 34,22,291 crore since the beginning of this financial year.

Last week, SBI increased base rate or the minimum lending rate for new borrowers by 10 basis points to 7.6 per cent.

This is the first review of the base rate since it was introduced in July this year. As per the RBI guideline, banks have to review their base rate every quarter.

Speaking about entry into merchant acquiring business, Bhatt said, the bank would soon finalise shareholding agreement with the joint venture partner post which the business would become operational.

Merchant acquiring business is facilitation of payment through debit or credit card at the retail outlets.

SBI is planning to place about 1.50 lakh point of sale (POS) terminals for debit and credit card payments across the country.

It plans to deploy 6 lakh POS terminals in the first five years of its operations.

The RBI has already approved the setting up of a wholly owned subsidiary for conducting merchant acquiring business by SBI in the name of SBI Payment Services.

SBI has already selected US-based Elavon Incorporation and Visa International as its joint venture partners for merchant acquiring business.