SBI credit offtake grows over 30%

State Bank of India has seen over 30 per cent growth in advances on the back of continuing strong growth in the economy, and is now stepping up efforts to mobilise more deposits to support the rise in credit.

The economy has been growing at more than 6 per cent and there is a strong credit offtake, chairman A K Purwar said after launch a broking arm of its subsidiary SBI Capital Markets.

Purwar said the growth in credit has been across retail, corporate, mid-size corporate and farm sectors. Infrastructure sector also had a substantial demand for credit.

The deposit growth has been healthy but we would like it to be more. The bank is making huge efforts to mobilise deposits through opening of salary accounts, he said.

SBI is revising its targets for deposit and credit growth in 2005-06 following a missive from the union finance minister P Chidambaram's to public sector banks for projecting slower growth rates than in 2004-05 when the economy was growing in excess of 7 per cent.

He said interest rates would remain stable in "near short term". There is some degree of pressure from factors such as an increase in the US federal reserve rate. Oil prices have softened a bit but they still rule high.

Referring to SBI's plans to expand overseas, Purwar said the bank was looking at acquiring banking entities in Asia and Africa and some announcement would be made soon.

SBICAPS Securities, the new broking arm, will provide equity broking services to both institutional and retail clients. It would open 30 branches in the current fiscal and increase their count to 100 by March 2006.

It will invest about Rs 15 crore to set up the network. The broking arm will have a paid-up capital of Rs 25 crore and would be open to acquisition of distributors.