About Challa Setty
Challa Sreenivasulu Setty, Chairman of the State Bank of India, has been active in several public engagements in mid-2026. On July 21, he commented on the listing of SBI Funds Management, calling it the largest IPO of 2026. He stated that the bank's focus remains on core deposit mobilization and lending, and that SBI would continue to sell its own subsidiary products rather than competing products. At the TransUnion CIBIL Credit Conference on July 13, Setty delivered a special address on credit and resilience, arguing that financial systems falter when resilience fails to keep pace with ambition and that buffers must be built before they are required. He identified four pillars for resilient growth: strong capitalization, forward-looking risk management, data-driven early warning systems, and balanced credit portfolios.
In June, Setty spoke at the Citi India Conference 2026, where he discussed India's growth story and the role of banking in achieving the Vision 2047 goals. He said that India may require incremental investments of nearly 200 trillion rupees by 2030 and another 400 to 450 trillion rupees by FY35 across infrastructure, manufacturing, energy transition, and other sectors. He described the banking sector as central to this transformation, acting as mobilizers of savings, enablers of entrepreneurship, and allocators of capital. Regarding the YONO app, Setty noted that it had crossed 4.5 crore active users and that the bank was considering commercializing elements of the platform for other banks. On the RBI's monetary policy, he stated that the house view expected a pause, and he expressed concern that inflationary expectations could moderate consumption, which he described as a key driver of the domestic economy.
Source: AI-verified profile updated from Challa Setty's recent appearances.
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Transcript (19 segments)
L
Latha0:12
Joining me now is the country's biggest banker, Mr. C.S. Setty, chairman State Bank of India. Thank you very much, Mr. Setty, for giving us your time. The first doubt that the market has is whether the ECB permission includes banks as well. Banks like yours, they're not normally referred to as PSUs, but you are public sector banks. So, does it include you?
C
Challa Setty0:33
Well, we don't have clarity on that. Of course, we'll wait for the guidelines to come. As you rightly said, Latha, the usual terminology of central PSUs do not include public sector banks unless banks are clearly mentioned there.
L
Latha0:49
Okay. But the government didn't discuss with you all. If you have to make a guess, which way would you lean? Are you all included?
C
Challa Setty0:59
I would rather expect that, you know, the banks also will be permitted to raise some borrowings because we do access international market. Currently, most of us don't bring the dollars into the country because of the exchange rate risk. You know, if the same swap window is available to the banks, not necessarily public sector banks, all the banks, hopefully, then I think that will bring a substantial foreign exchange into the country.
L
Latha1:27
Okay. What about the FCNR, foreign currency non-residents? Have you all done any back-of-the-envelope calculation on how much might, how much can come in in that route?
C
Challa Setty1:40
We have not done, but I think there should be a good demand. One is we need to look at what could be the potential interest rate which is being offered. And while the swap cost being borne by the RBI is extremely positive because most of us when we are raising the FCNR B deposits, the deployment becomes an issue because most of these FCNR B funds have to be made available to local corporates and after the hedging cost, they compare with the rupee cost and it was not being competitive because of the hedging cost going up in the recent times. So, that I think is a very positive development and I believe our willingness to mobilize more FCNR B would be there because deployment is easier.
L
Latha2:31
I clearly asked the governor and he said that, I mean of course we're all waiting for the press release. He said FCNR B will not be included for CRR and SLR which was the case in 2013 as well. So, that also makes it a little more attractive.
C
Challa Setty2:46
That makes it more attractive, yes.
L
Latha2:49
And he said that they will allow you all to even offer loans. That is, leveraged positions also will be allowed which means foreign banks also bring in more money. I guess they have more leeway to offer leverage. So, therefore do you think...
C
Challa Setty3:05
Let's wait for the guidelines but I think it's important to acknowledge that it's a very major number of steps which are announced in terms of the forex as well as in the government securities which shows the very strong intent of the regulator and the government of India to ensure that sufficient capital is flowing in the country.
L
Latha3:25
Okay. So, does the funding position generally of banks improve? When I looked at the CD rates today at the end of the policy announcement, already the CD rates yields had fallen by about 20-25 basis points. Likewise, corporate bond yields also fell. So, do you think that generally cost of funding for the banking sector is likely to get easier because of these doors getting opened.
C
Challa Setty3:52
I definitely think so because today the one is of course the robust credit growth is also putting pressure on all of us to raise the deposits. Some of us have very strong retail franchise. Some of us do not have, which means that the elevated wholesale deposit rates and also the one which you mentioned in terms of CD rate being higher is something what we have seen in the market in the recent times. Despite having, you know, adequate durable liquidity in the system. So I believe that, you know, if we can attract good amount of deposits under the FCNRB and even ECBs because some of these ECBs if central PSUs are front loading in terms of raising, they have to keep in terms of the rupee deposits with the banks after swapping. So I believe the overall liquidity support through these deposits also will be higher and which will moderate the cost of resources for the banks.
L
Latha4:53
And these are going to be longer term money and not...
C
Challa Setty4:56
Five year, five year money hopefully.
L
Latha4:59
Yes. So clearly that also brings some stability of funding. Am I missing out something? For you what were the other key takeaways?
C
Challa Setty5:08
I think it's broadly and all the capital flows are very important but I think since you also have the numbers in terms of growth rates, inflation, GDP numbers, which means and I'm a little, I think I've not heard your commentary on the GDP growth rate.
L
Latha5:29
Numbers were so much better than expected. You know the poll I did was 7.3.
C
Challa Setty5:34
We were presently surprised on the manufacturing numbers, which also shows that broadly the lot of measures what the government of India has been taking in terms of the PLI and in terms of pushing the manufacturing has really seemed to be working. I think we need to watch for a few more quarters, but I think the numbers on the manufacturing have been pleasantly surprising.
L
Latha5:58
Okay. Okay. That's good to hear, sir. Thank you very much for your reactions to the policy.
