Within days of Reserve Bank Governor Raghuram Rajan expressing concerns on banks' aggressive retail play at the cost of infra financing, SBI Chairman Arundhati Bhattacharya on Monday said there is no bubble-like situation in the consumer lending segment.
"I don't think we are in a bubble territory as yet, as long as we continue to maintain our good underwriting standards and also get the help of digital (tools), which will enable us to have an even better picture," Bhattacharya said.
She was speaking in response to a question on whether banks are heading towards a possible bubble in the consumer financing segment.
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Addressing the annual convention of the Indo-American Chamber of Commerce here, she said the median age in the country is 26.5 years and these are the people who need loans to fulfil their aspirations.
"Therefore, I think what is being done now is to fulfil those unmet demands," she said.
Last week, outgoing Reserve Bank Governor Raghuram Rajan had raised concerns over banks, especially state-run lenders, shunning project loans and aggressively targeting retail borrowers.
Talking about the upcoming redemptions of FCNR-B deposits, Bhattacharya said it will put pressure on liquidity.
"Some amount of liquidity will go out with the FCNR redemptions. So, it is important for us to have comfort on liquidity side," she said.
She said the RBI's stance of maintaining liquidity at neutral level is good and needs to be maintained.
"I hope the new governor Urjit Patel will retain the stance (to keep liquidity at neutral)," she said.