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State Bank of India bets on private capex to grow corporate credit

August 08, 2023

State Bank of India bets on private capex to grow corporate credit
(SBI) expects to give out 3.5 trillion rupees ($42.30 billion) in corporate loans over the rest of this financial year as private companies step up investments in key sectors, the chairman of the country’s largest lender said.

The Indian economy has been starved of private investment for years now but a surge in government capital spending and deleveraged corporate balance sheets has led to early signs of companies adding to their capacity.
 
And nearly 80% of this incremental loan demand is coming from the private sector, SBI chairman Dinesh Kumar Khara told Reuters in an interview over the weekend.
 
“Invariably there is a rub-off effect on small and medium enterprises also.”
 
About 70% of the 3.5 trillion rupees would be in term loans and help boost SBI’s corporate loan book by 12%-13% this fiscal, said Khara.
 
“New projects are coming into greenfield sectors like renewable energy, batteries and battery storage as well as EVs (electric vehicles) among others,” he said.
 
“In the core sectors, it is essentially the addition to capacity in sectors like steel, cement, road infrastructure and airports.”
 
SBI’s total domestic advances were 28 trillion rupees as of June 30.
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