Tariff uncertainty may harm investment decisions: SBI chief CS Setty

State Bank of India (SBI) chairman CS Setty on Friday said that impact of US tariffs on banks will be limited from sectors that are directly exposed to the United States (US).

 

But, the narrative around the uncertainty is more damaging and may cause delay in investment decisions and postponement of spending, he added.

 

The overall exposure of the banking system to four-five sectors, which are directly exposed to the US, is very limited and SBI also does not have much exposure on these sectors.

 

Setty, speaking in post results media interaction, said, “The second factor that we have to take into account is the uncertainty in terms of how these tariffs are going to play out and how quickly this is going to be addressed.”  ALSO READ: Banks roll over maturing amount at VRRR auctions as rates breach repo rate

 

It is due to uncertainty that many investment decisions may be delayed and people will postpone their spending, he added.

 

“Our assessment is that while the direct impact on these sectors may be limited, the sooner this issue gets resolved the better. I am sure the government is working on that,” he said. 

 

Indian Exports are broad-based — both in terms of basket of exports and as well as geographies to which they go to.

 

“The impact will be limited. The narrative is more damaging. I think that needs to be addressed,” he added.

 

Referring to corporate subdued credit offtake, Setty said, “Corporations are not talking about tariffs but I think for the last two-three years we have seen global uncertainties — wars across geographies and geopolitical tensions.”

 

“They are all adding up to this but I believe once they have greater visibility on the domestic consumption side, they would come back to the investment cycle. SBI has a very large pipeline. It is only that in some of the core sectors, the decisions are delayed,” the SBI chairman said.