India’s real GDP growth set for upsurge: SBI Chairman

India looks all set to witness an upsurge in real GDP growth, according to State Bank of India (SBI) Chairman Dinesh Khara, and bolstering the trend will be demand for investment and a sustained positive approach on the part of consumers and businesses.

“As far as India is concerned, conditions are shaping up for an upshift in the real GDP growth, backed by a strong investment demand and upbeat business and consumer sentiments,” Khara said while interacting with the press after declaring the bank’s results for the quarter ending March 2024.

The standalone net profit of SBI went up by 23.98 per cent year on year to scale Rs 20,698 crore. This is the bank’s highest quarterly profit ever. For the fiscal year 2024 (FY24), the bank’s profit rose by 21.59 per cent to reach a record Rs 61,077 crore.

The consumer price index-based inflation, or CPI, stood at 4.9 per cent in March after a 5.1-per cent average in January and February, Khara said. The CPI could further recede and touch an average of 4.5 per cent in FY25. Notably, the average CPI in FY24 was 5.4 per cent, according to a report in the Indian Express.

The gross advances of SBI saw a 15.24-per cent surge in FY24 while retail advances increased by 14.68 per cent. Advances by Small and Medium-sized Enterprises (SME) grew by 20.53 per cent year-on-year, while agriculture advances rose by 17.92 per cent in the same period, accounting for a spurt of 16.26 per cent year-on-year in domestic loans. The momentum in SME, agriculture and retail sectors should continue in the next fiscal, Khara added.

The scheduled commercial banks maintained a credit growth of around 20 per cent and deposits saw a nearly 13-per cent increase. On SBI’s credit growth possibilities in FY25, Khara said: “Much of it will depend on how the economy looks like. But yes, we are hoping that we would be in a position to maintain this growth trajectory which we have recorded in this year (FY24), of around 15-16 per cent. I would still maintain that our (credit) growth (in FY25), as far as the loan book is concerned, would be in the 14-16 per cent range.”

In the March 2024 quarter, the bank’s corporate loan book witnessed a 16.17-per cent increase year on year. In FY25, the corporate loan pipeline of SBI is estimated to be around Rs 4 lakh crore, with the private sector accounting for 75 per cent of the amount. SBI’s deposit growth in FY25 is expected to be 12 to 13 per cent.

The bank’s Net Interest Income (NII) increased 3.13 per cent to scale Rs 41,655 crore in the March 2024 quarter. The figure stood at Rs 40,393 crore in the year-ago quarter. The Net Interest Margin (NIM) slumped by 37 Basis Points (bps) to reach 3.47 per cent from its year-ago quarter mark of 3.84 per cent.

For the ongoing fiscal, the Reserve Bank of India (RBI) has projected a real GDP growth of 7 per cent.