Arundhati Bhattacharya also talked about giving boost to credit growth with excess deposits in hand.
The State Bank of India chairperson, Arundhati Bhattacharya on Monday said “SBI hasn’t survived for 211 yrs by ignoring competition. Have huge collaboration; don’t just rely in branches.” She was at Mint Conclave. Bhattacharya said SBI has opened 50, 000 -70, 000 accounts in a day before note ban; 89 lakh accounts after the ban. She also talked about giving boost to credit growth with excess deposits in hand. She said that banks have been conservative on deposit rates. “Want to give fillip to credit growth with excess deposits in hand, have been conservative on deposit rates,” she said. “Deposit rates are untenable, will have to be cut in future,” she added.
October industrial credit growth in India was lowest in 6 years, the reason for this sharp decline was low off take of credit by small and medium enterprises and also by large industries. After demonetisation banks saw heavy deposits and hence its deposit rate also grew.
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Earlier she said that banks have huge low cost funds driven by deposits following demonetisation drive. If businesses have deposited money during the drive they will take it out for further investments but individuals who were having the money at home may not need to withdraw, according to her. Her expectation was that banks will be able to keep at least 40 per cent of the deposited amount.
The recent rate cut in deposits from 10 per cent to seven per cent was termed as liquidity-driven rate cut by her. She also said that SBI is open for business and this is the need of the economy.