New SBI chief sees no pressure on rates

The new State Bank India Chairman Om Prakash Bhatt has said there is no upward pressure on interest rates as of now in the wake of a comfortable liquidity position.

"Interest rates firmed up in March. It cooled down in April. Now, the liquidity condition is comfortable. I see there is no upward pressure on interest rates now, but it is not coming down," Bhatt said.

He said the bank would take a call on reviewing rates only after seeing the Reserve Bank of India (RBI) move in its forthcoming quarterly review of the monetary policy.

Meanwhile, Bhatt said, the bank aims to record 17 per cent hike in deposit base as against 13 to 14 per cent last year. "Overall credit growth has been targeted at 25 per cent vis-a-vis 29 per cent last year," Bhatt said.

He said the bank aims to increase its market share in terms of business to 19 per cent in the next two years from 17 per cent now. SBI as a group enjoys 25 per cent market share in the country, he added.

"We want to increase our market share by at least one percentage point each year, that is to make it to 19 per cent in two years. This is our minimum target and we want to make it in all areas," Bhatt said.

The bank, he said, would raise Rs 2,000-2,500 crore in the current financial year to meet capital adequacy ratio arising out of Basel-II implementation norms and escalating credit growth. The bank raised Rs 2,300 crore earlier this year.

On acquisitions, Bhatt said the bank intended to ramp up its presence in the Gulf countries through both organic and inorganic routes as well as by entering into partnerships.

"We want to expand our overseas presence as much as possible. India Inc from any field is on acquiring mode in abroad. We want to serve them," he said, adding that a lot of activities were taking place in the Gulf region and people from India across all sectors are trying to set up shops there.

However, he declined to divulge details regarding the investment in the Gulf region. "We are currently working on it," he said. Bhatt said the bank is open to domestic acquisition also, though there is no offer as yet.

The SBI Chairman said he would like to see all its four (out of seven) unlisted subsidiaries listed on the bourses.

"We like to see all our four unlisted subsidiaries listed on the market. State Bank of Patiala and State Bank of Hyderabad would be listed first since these could unlock larger value for us," Bhatt said.

SBI falls short of the RBI stipulated agriculture lending target. Currently, out of its total exposure to priority sector, only 13.46 per cent goes to agriculture against the stipulated 18 per cent.

The bank would lay added emphasis on the agriculture sector to bridge the gap and to tap the huge potential in this area, Bhatt said.

"NPA in the agriculture sector is a cause of concern for all banks. However, this is less for us," he said.

Describing customer as "God", the SBI Chairman said the bank needs to improve its customer relationship management.

"There is definitely room for improvement of customer relationship. It's got to improve across all branches if you want to grow," he said.