'Enabling environment of West Bengal will help business and credit growth'

SBI's Kolkata Circle sees 18% credit growth as MSMEs, housing, agriculture and infrastructure drive lending demand

Credit demand in West Bengal is expected to improve as the new government creates an “enabling environment” for business, says R Natarajan, chief general manager, Kolkata Circle, of State Bank of India (SBI). Natarajan, in an interview with Business Standard, at the bank’s Kolkata head office, speaks about SBI’s lending targets and how digital services are changing banking. Edited excerpts:

 

How is the eastern region performing in credit growth and its contribution to current account savings account (Casa) deposits in SBI’s overall operations? 

Credit growth is robust now; the entire industry is doing well. For the bank as a whole, credit growth in FY26 was around 17 per cent year-on-year (Y-o-Y). Here, in this part of the region — West Bengal, Sikkim, Andaman & Nicobar Islands — growth was about 18 per cent. We have about 1,350 branches. Deposits are also growing at around 10 per cent in this region, while at the overall bank level, growth is around 11 per cent. The Casa ratio is around 39.4 per cent for the bank, compared with around 40.15 per cent in this region. Savings bank growth is almost the same – 10 per cent at both the bank level and eastern-region level. Credit growth is driven by retail, corporate credit, micro, small and medium enterprises (MSMEs), and agriculture.

 

What growth opportunities do you see in the region? 

With the new government in West Bengal, a lot of new vistas are being opened. Announcements made for industry, such as a single-window clearance system, will fast-track the approval process. They will attract a lot of people. Those already doing business here are also seeing greener pastures. 

 

There are many MSMEs here, along with the steel industry and mining companies such as Coal India. Retail (industry) is also doing well, as are the housing sector and unsecured personal loans. Infrastructure financing is happening, there is a lot of activity in warehousing. Investment credit for agriculture is also seeing an uptick. 

It has been four months since the new government. As it announces business-friendly policies, do you see an uptick in credit demand? 

Yes, but apart from that what the bank has done is use an analytical model called the Business Rule Engine. It gives a “go” or “no-go” decision. It tells us whether a proposal is bankable or not. 

We started this in 2024, initially for loans up to ₹50 lakh. This was subsequently increased to 5 crore and, from last month, to ₹10 crore. This has been very successful — around 85-90 per cent of the proposals we source are going through this model, allowing us to give faster sanctions. There is demand as the environment is changing. The enabling environment is there; people will get support from the government by way of approvals. So definitely they will look towards credit. We are also meeting government officials and ministers and telling them that we are ready to partner with them because the credit-deposit ratio of the state has to improve. It is very low; it has to go up.

 

Which retail loan segments are seeing high growth? 

MSMEs; then there is strong demand in housing, with a lot of new projects coming up. The government has placed some restrictions, but barring that, there is good demand. Developers are looking at high-value projects where the margins

are higher. 

We are also involved in Pradhan Mantri Awas Yojana, which is smaller-ticket, affordable housing. Other than that, we have unsecured loans, including car loans and education loans. We are very active in education loans. Agriculture, MSMEs, education and housing loans up to ₹50 lakh — all this will help us to achieve our priority sector lending targets.

 

With customers switching to digital operations, how has your branch network changed? 

The dependency on the branch channel has come down a lot. As many as 98.4 per cent of the transactions are happening through alternative channels. But despite that, the branch channel continues to hold good. It will be there because it is required for service. Even though customers are taking most services through digital channels, branches are important at the service level. 

There is no major change per se in our branch network. We are also trying to consolidate the branches wherever there is some overlap.