According to Mr. Pratip Chaudhuri, Chairman, SBI, its credit growth may be 16-19 per cent this fiscal, lower than earlier estimates of 19-22 per cent, mainly on account of slowdown in demand for long term equipment finance because of high interest rates.
Chaudhuri said, however, the growth in retail which is pegged at 25 per cent of the total portfolio may remain as estimated.
Replying to a question on the state-owned bank's Net Interest Margins (NIM), he said it was expected to be 3.5 per cent, as against 3.35 per cent in the last fiscal.
Chaudhuri said, "The growth is expected to come in due to the increase in our base rate from 8.5 per cent to 9.25 per cent. Secondly, the home loans that were given at 8 per cent in the first year and 9.25 per cent in the second year have been discontinued.
"Moreover, corporates are also accepting higher rates of interest. So, the initial trends of NIM are very positive."
Meanwhile, on the net Non-Performing Assets (NPA), at 1.63 per cent as of March 31, he said, "Our objective would be to bring it down at least by 25 basis points in the current financial year."
Speaking on the merger of associate banks with SBI, Chaudhuri said the move costs a lot of money both in terms of capital requirement as well as staff benefits.
He said SBI will think of merging associate banks only next year. The merger of State Bank of Saurashtra happened in 2008, and that of State Bank of
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