The State Bank on Friday said it is expecting to clock around 23 per cent growth in credit offtake this fiscal and expressed optimism that bad loans would come down as the farm sector recovery gathers momentum.

The country’s largest lender recorded only 18 per cent credit growth during the past fiscal.

On non-performing assets, SBI chairman O.P. Bhatt said, “Rate of formation of NPA is coming down and if the recovery of agriculture sector is good, it would come down further.”

If the agriculture and retail sectors perform well (on normal monsoon), it will push up credit growth to 22-23 per cent from the second quarter, Mr. Bhatt said, adding he expects infrastructure and capital expenditure sectors to pick up steam.

With industries across the country working at 80 per cent capacity, close to the peak of 85 per cent, offtake from the bank would be on higher side, the SBI chairman told reporters here on Friday.

Asked about the possibility of interest rates moving up, Mr. Bhatt, who was here to inaugurate the bank’s first wind farm project on the outskirts, said there would be little change going forward. The base rate was expected to settle around eight per cent, he said.

Stating that the merger of State Bank of Indore with SBI would be materialised by June, he said the merger issue of other subsidiaries would be taken up on a case-by-case basis.

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