Pay hikes to boost retail loan growth by 17-20%: SBI VG Kannan, Managing Director, SBI

Pay hikes to boost retail loan growth by 17-20%: SBI 

VG Kannan, Managing Director, SBI

30th June 2016; CNBC-TV18

·           Discussing the stressed asset situation, Kannan told CNBC-TV18 that the worst is probably over. However, it does not mean that all bad news is done for. With monsoon playing well and implementation of 7th Pay Commission, growth trajectory is coming back in the economy, he says. Pay hikes will boost retail consumption and housing sector both. Kannan expects SBI's retail growth to be in the range of 17-20 percent on back of pay hikes. While there is also a possibility of a jump in inflation, it will not be substantial.

·           SBI has always been raising this foreign country funds overseas at regular intervals. We are raising from half a billion to USD 1.5 billion over the last so many years and this is one of the regular fund raising activities to enable our foreign offices to fund the assets. The exact timing will be decided and we are looking at the various global scenarios and the Brexit scenario also. May be certain advantages also because we do expect good pricing -- the exact timing is not yet decided. It will be decided in due course.

·           We have been expecting around 17-20 percent growth at the worst scenario because this is directly a retail demand that is likely to come up. Therefore, 17-18 percent or even 20 percent could not be ruled out.

·           I would say that probably the worst is over and I won't say any bad news is not there but the worst is possibly over. We expect now the monsoon also playing out very well, I think the future should be much better than what we had in the past.

·           I should see a good pick up in the retail especially in the housing as also in the retail and that should act as a boost to the economy. So there are certain positives to it. Overall, we expect there should be improvement in demand therefore add to the growth of the Indian economy.

·           Give us an update on the SBI merger, the last time we spoke you guys mentioned to us that by end of FY17 it would be completed, just wanted to know when you would be sending the merger plan to the government and just a status check on that? A: It is work in progress. We are on schedule.