The better part of the current fiscal has witnessed an abysmally low level of credit offtake, which is just in the process of being corrected, P G Kakodkar, State Bank of India chairman, said yesterday.
The SBI chairman also said his bank would review the prime lending rate (PLR) in view of the finance minister's recent statement to bankers, but said interest rates alone would not increase credit growth.
Based on the trend of increasing deposits over the past fortnight, Kakodkar said that 1997-98 should be a very good year for the banking industry. He was addressing newspersons in Calcutta yesterday. The problem, according to the SBI chairman, in the current fiscal, was low demand for credit rather than high interest rates as is commonly believed.
SBI had reduced its PLR by two percentage points to 14.5 per cent in the current fiscal.