There is a need for a level playing field among financial savings instruments, according to State Bank of India (SBI) Chairman CS Setty. He said that in an evolving equity and capital market environment, earlier incentives may have been justified, but now financial savings instruments should compete on equal footing.
"Globally also, we have not seen anywhere where bank deposits are given any special treatment. At the same time, equity instruments are also not given a special treatment in many jurisdictions. So, in an evolving equity market environment, those benefits were probably justified earlier. Now, I think there should be a level playing field for financial savings instruments," Setty said.
Speaking at the launch of Chakra, SBI's new centre of excellence for financing sunrise sectors, Setty said, "I think in our assessment the potential for the eight identifed sunrise sectors under Chakra is placed anywhere around Rs 100 trillion, in next five years. The debt capital required will be probably around Rs 20-22 trillion."
Chakra will focus on eight high-growth sectors with global traction and transformative potential. They are renewable energy, advanced cell chemistry and battery storage, data centers, semiconductors, electric mobility and charging infrastructure, green nitrogen and ammonia, green organization technologies, smart and sustainable infrastructure.
Together, these sectors represent the backbone of India's next manufacturing and infrastructure wave and a significant opportunity to raise manufacturing's fair share of GDP towards self-advocacy, added Setty.
Setty said Chakra has been conceptualised to address precisely this challenge how to finance emerging and sunrise sectors that come with high potential but also unique and evolving risks. The centre of excellence, he said, is not an SBI-only initiative but an industry-wide effort, with more than 20 domestic and international financial institutions already on board.
The objective is capacity building both within the banking system and across financial institutions to better assess risks, structure financing and support policy advocacy for these sectors.
A key reason for underdeployment of capital today, Setty noted, is the lack of understanding of risks associated with these emerging sectors. Chakra's focus, therefore, will be on improving project appraisal and structuring finance in a way that mitigates risk rather than avoiding these sectors altogether.
Setty was clear that Chakra is not intended to function as a conventional think tank. While policy framing and advocacy will be part of its role, the core objective is to create bankable financing structures.
Under Chakra, project finance teams from partner institutions will work alongside SBI's team, enabling shared learning and joint financing. Several foreign banks, including Japanese institutions with global experience in financing data centres and infrastructure, are also part of the initiative, bringing both capital and expertise.
Setty emphasised that credibility comes from actual financing. "Unless you are also providing financing, nobody really takes you seriously. It cannot simply work as a think tank," he said.
Setty stressed that financing for sunrise sectors cannot rely on traditional project loans alone. Many of these sectors, especially semiconductors and green hydrogen, may not be immediately viable without policy support, alternative capital structures or government backing.
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Chakra will therefore work with equity investors, private capital providers and multilateral institutions. Setty pointed out that global institutions such as the World Bank among others are willing to provide long-tenor capital of 15-30 years, which Indian banks are typically unable to offer.
He also indicated that Chakra could explore platform-based approaches, where multilateral institutions commit capital for a defined period rather than project-by-project funding.
Setty concluded by reiterating that long-term capital for sunrise sectors cannot come only from banks. Alongside banks and NBFCs, private equity, equity capital and large Indian corporates which currently hold substantial cash balances will need to play a role.
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