In the last seven decades, State Bank of India’s total business (deposits plus advances) has zoomed from a modest ₹332 crore (when Imperial Bank was nationalised in 1955 and renamed State Bank of India) to over ₹100 lakh crore at the last count.
Challa Sreenivasulu Setty, Chairman of India’s largest Bank, said that he expects the total business to double to ₹200 lakh crore by 2031, assuming a deposit and credit growth of 10 per cent and 12 per cent, respectively.
The SBI Chief noted that the assets side of his bank’s balance sheet constitutes 20 per cent of the Indian economy. The bank intends to increase this to 25 per cent.
You highlighted the ₹100 lakh crore business milestone in your bank’s second quarter results. How much time will it take for your bank to add the next ₹100 lakh crore business?
Our ₹100 lakh crore business comprises ₹55-56 lakh crore of deposits and ₹44-45 lakh crore of loans. This is an indication of our ability to mobilise deposits and lend. So, the business level is important. It also shows the bank’s involvement in the economic activity.
And if you take 10 per cent deposit growth and 12 per cent loan growth, it takes 6 to 7 years to double the business. Probably by 2031 our business will reach ₹200 lakh crore.
If we are growing deposits, on an average, at 10 per cent every year, our deposits will go up by ₹5.5-5.6 lakh crore. Similarly, if we are growing at 12 per cent on the advances front, we are expanding the loan portfolio by ₹5.28-5.4 lakh crore. That means that we are adding ₹10 to 11 lakh crore of business every year. But there is a compounding effect.
What factors will help you achieve the goal of entering the league of top 10 global banks by market capitalisation by 2030?
Market capitalisation is a function of many things. One, what is the capital market size itself? As the equity markets grow, some of the market capitalisation accrual will happen, right? And then, your own performance in terms of price to book, price to earnings, etc., many things enter the picture.
And today, I believe that our market capitalisation of $100 billion has happened because of many things, particularly consistent performance.
So, assuming that there are no adverse cycles and the consistency of performance is what we have today, with these two things, maybe, we can achieve the goal.
Our market capitalisation ranking (among banks), depending on the market movement, ranges between 23 and 29 globally. On the assets side, we rank 46. But on the market capitalisation side, we are better ranked because the valuation, which is available for Indian financial services companies, is good.
So, I said that by 2030, we probably will be there in the top 10. If it is so, then there are two-three things which we need to assume. One is that the Indian economy and the capital market continue to perform well. We are proxy to the Indian economy.
And I am assuming that in the next 4 to 5 years, we may not have any headwinds – in terms of asset quality, growth rates, technology, digitalisation – internally as far as SBI is concerned. I believe that we are well poised in that movement, trajectory.
Rest of the banks too will grow. Their market capitalisation will also grow. So, if all other things remain the same, we have the potential to get there. It is not SBI alone, but there are three banks in India which are capable of getting into the top 10 in terms of market capitalisation.
You are already a Domestic Systemically Important Bank (D-SIB). Will doubling of business in 6-7 years and breaking into the league of top 10 global banks by market capitalisation make you a Global-SIB?
G-SIBs are classified as per their balance sheet size, cross-jurisdictional activities, complexity, lack of substitutability and interconnectedness. We are the 43rd-largest bank globally in terms of assets. The size of a bank’s balance sheet is a function of the economy. Today, the assets side of our balance sheet constitutes 20 per cent of the Indian economy, and we intend to take it to 25 per cent. Just imagine, if India becomes an $8 trillion economy, our aspiration is to become a $2 trillion bank. So, this is what will make us G-SIB going forward.
Your credit to deposit (CD) ratio at 69.82 per cent as at September-end 2025 is modest compared to other banks. Do you have a plan to up this?
Our CD ratio crossed 70 per cent after a long time. We revised our credit growth guidance for FY26 to 12-14 per cent recently (from 11 per cent earlier). Taking this revision into account, our CD ratio could rise to 72-73 per cent by March 2026. You must understand that many banks have higher CD ratio because of lower deposits. We are the largest lender in the country with significant deposit float. Even at a (deposit) base of ₹55 lakh crore, if we grow at 10 per cent, we will add about ₹6 lakh crore every year.
During Covid-19, we had tremendous inflow of deposits. We have always had a modest CD ratio due to our large franchise. But if you think the other way round, this provides us a good opportunity to grow, we need not compete aggressively for bulk deposits. Further, with the liquidity on our balance sheet, we can support credit growth to the tune of ₹12 lakh crore. This gives us fire-power to grow. As the economy grows by 7-8 per cent, we are quite confident of supporting this growth.
How long will the ₹25,000 crore you raised via QIP last?
With our current capital base, we need not raise capital for the next 5-6 years. Our internal target for CRAR (capital to risk-weighted assets ratio) is 15 per cent through the cycle and CET (common equity tier)-1 ratio of 12 per cent. If we have to maintain these ratios, with our current profits and expected credit growth, I don’t think we have to access markets for 5-6 years.
Is there scope for banks to reduce deposit rate following the repo rate cut?
It is a shallow rate cut of 25 basis points. I don’t think banks will cut deposit rates aggressively. Credit growth is robust. Every bank will be looking for deposits. At the same time, the 25-bp repo rate cut would have minimal impact on margins as the full benefit of 1 per cent CRR (cash reserve ratio) cut is available. Also, whatever reduction we had one year ago, fixed deposit will be re-priced at that rate. That benefit will also be available for banks.
Are you planning to sell your remaining 10.78 per cent stake in YES Bank?
We are free to offload our stake, but our approach is that we want strategic investors (SMBC) to settle down.
