New Delhi, Feb 28 (IANS) Country’s largest lender State Bank of India (SBI) on Thursday said credit growth in the banking sector will continue, allaying fears of certain dip in loan expansion activity in the sector.
“If you look at credit offtake figures of RBI, the industry has been growing around 15-16 per cent and going forward I think that trend will continue,” SBI Chairman Rajnish Kumar said on the sidelines of a banking event.
The minutes of the Monetary Policy Committee of the Reserve Bank of India (RBI) this month stated that overall financing conditions have been improving, with bank credit growth in double digits and the total flow of resources to the commercial sector significantly higher than a year ago.
Credit flows to services (such as non-banking financial companies, transport operators and trade) and in the personal loans category, especially housing, have been robust. However, credit growth is yet to become broad-based. Credit flows to the industry, in particular, have been anemic, credit to micro and small industry contracted in December 2018, while credit to large industry expanded at a moderate pace, the RBI minutes said.
On the banking sector’s recovery roadmap, the SBI chief said there are some big cases at the NCLT and they all are in advance stage. As soon as the process for adjudication is over, banks will get the money.
With many of the banks posting profits and some getting out of the prompt corrective action (PCA), Kumar said this is a positive development for the banking sector and he agrees with Finance Minister Arun Jaitley that future merger of the sector will have to take cue from the current case of Bank of Baroda-Dena Bank-Vijaya Bank merger.
“We are already in the process. April 1 is the day when the merged entity of Bank of Boarda-Dena Bank and Vijaya Bank will start operating. The success of this merger will decide the future course of further mergers,” he said.