Growth in deposits and credit was under pressure last financial year due to slowdown in the economy, according to bank chiefs.
State Bank of India may end the financial year with a 14 per cent growth in deposits and 16 per cent growth in credit, said its Chairman, Mr Pratip Chaudhuri.
For the banking system, the Reserve Bank of India had given a guidance of 16 per cent both credit and deposit growth for last year.
Speaking to reporters on the sidelines of a banking seminar on Saturday, Mr Chaudhuri said that deposit growth was not very good in the just-ended fiscal and the situation looks difficult this fiscal as well. Bank deposits are losing out to tax-free and infrastructure bonds. For the next year, the bank is looking at credit growth of 19-20 per cent.
Mr A. Krishna Kumar, Managing Director, SBI, said that if the RBI cuts the cash reserve ratio in the upcoming annual monetary policy then the bank could pass on the benefit to all borrowers.
However, if the RBI leaves interest rates unchanged then there will be no motivation for cutting lending rates, he said.
On deposit growth, the SBI chief sounded a note of caution.
He said that this year deposit growth of the banking system was considerably less. It is expected to be about 14-15 per cent in FY2011-12, compared with 18-19 per cent in the previous year.
Union Bank of India
The Chairman and Managing Director of Union Bank of India, Mr D. Sarkar, said that the bank recorded 17-18 per cent growth in credit and 9-10 per cent growth in deposits.
The bank will focus more on the retail segment to grow its business this fiscal.
Union Bank will take a call on the credit and deposit projections for ths fiscal once clarity emerges on the RBI's interest rate stance, said Mr Sarkar.