SBI Pitches for New Projects to Revive Credit Growth

State Bank of India expects the upcoming Budget to provide relief to public sector banks struggling under rising bad loans and low credit offtake. Arundhati Bhattacharya, chairperson of SBI told NDTV that Finance Minister Arun Jaitley should announce some big projects in a bid to boost government spending.. "Either from the government side or from the PSU side we definitely would like to see some of those (projects) announcements in the Budget," Ms Bhattacharya said. (Watch interview). New projects may not be enough to push credit growth sharply, but there might be an improvement over the previous quarter, she added. Most of the credit growth will happen after two quarters, she said.. "Both coal auction and spectrum auction should trigger some amount of credit pick up. We are hoping that this trigger will also ensure that loan pick up happens in other areas, especially areas like mining," said Ms Bhattacharya.. New projects are expected to revive the demand for bank loans, currently growing at the slowest pace in over a decade. Corporate balance sheets in the private sector are already burdened with excess debt, so lenders have little hope that the private sector will be able to drive credit growth in the near future.. There's a near consensus among economists that Mr Jaitley should increase government spending to kick start the economy; however, economists differ on whether the government should spend more at the cost of fiscal prudence or cut back subsidies to boost spending.. Ms Bhattacharya said "some amount of spending must start for the economy to start rolling again.". Measures to encourage small depositors and savers to deposit more with banks should also be expected, the 58-year head of India's biggest lender said. The government should announce policies that incentivize the use of plastic money over cash, she said.

SBI Pitches for New Projects to Revive Credit Growth

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