The country’s largest lender State Bank of India on Thursday said there is some concern regarding the pace of growth of credit offtake, but added the bank expects it to gather momentum as busy credit season begins next month.
“We have estimated credit growth to be around 20-22 per cent this fiscal, but now it is only around 18 per cent. It will be a concern if it doesn’t pick up. But we hope it picks up as we enter the busy credit season,” State Bank of India chairman OP Bhatt told reporters.
To a pointed query on whether there is a decline in credit growth, Mr. Bhatt said, there is no deceleration but it is not growing as the bank expected. However, compared to last year, it is growing, as it was only around 11 per cent this time last year.
When sought his response to Reserve Bank Governor D Subbarao’s observation the public sector bank heads need to be paid better to retain talent, Mr. Bhatt said, “Badhani hi chaahiye. Obviously, it has to be increased.”
Expressing his concern over the low salary structure in PSU banks, the Governor addressing the same banking meet on Tuesday had said due to the poor compensation package, PSBs would lose talent to private sector lenders.
“The executive compensation in the public sector, as is well known, is lower than that in the private sector...If public sector banks are required to compete with private sector banks on a level playing field, there is a good case for compensating them too on a competitive base,” Subbarao had said.
