Chairman, State Bank of India
Watch SBI Chairman, Shri Challa Sreenivasulu Setty
Watch SBI Chairman, Shri Challa Sreenivasulu Setty, reflect on the Bank’s robust Q4 FY26 results and overall FY26 performance, including the highest-ever Net Profit recorded in any Financial Year, during an insightful interaction with CNBC-TV18.
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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.
Transcript (13 segments)
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Ritu0:13
Well, State Bank of India has reported its highest ever annual profit of more than 80,000 crores for FY26, but for the quarter, profits were up about 6% year-on-year. Operating profits were down mainly on account of the treasury income hit. Asset quality held up, but margins were lower in the quarter. Let's bring in the chairman of State Bank of India, Mr. C.S. Setty, for more on the numbers and the way ahead. Mr. Setty, always a pleasure to have you here. But you know, if you look at the stock reaction to your numbers, one of the key disappointments for the street has been the margins. They're down about 18 basis points sequentially, 21 basis points over the previous year. And it's been a battle for all banks in the quarter. But to your mind, where does NIM bottom out for SBI? And is there any leeway to get beyond the 3% range you've been guiding for?
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Challa Setty1:03
I still feel that we fulfilled the guided number. Our exit NIM guidance was above 3%, and I think that has been fulfilled. And the NII impact in Q4 was essentially because there's been a repo rate cut in December 15th last year, and that has been fully factored in the Q4. That is number one. Number two, I think there's been a good improvement in our EBLR portfolio. That is also adding to a certain amount of NII reduction. But I believe that our guidance in terms of NIM being above 3% still holds good for the current financial year, and we have no concern in terms of managing those margins.
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Ritu1:52
Okay. While we appreciate your asset quality is at a two-decade low currently, you've been the only large bank on the street to report a rise in slippages. Where did that come from? And secondly, for FY27, if you could give us a guidance on what the credit cost, slippages, recoveries — what would that look like, keeping in mind what's happening in West Asia and MSME being a significant portion of your book?
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Challa Setty2:20
So, the slippages what you see in Q4, I think we need to adjust with the subsequent pullbacks which have happened. Around 850 crores have been pulled back from those slippages. So if you consider that pullback, I think there's no concern in terms of the increased slippages. And across segments we've seen excellent credit quality. There's no concern at this junction in terms of asset quality. And the guidance for the current financial year also is remaining the same level of our usual guidance of 50 basis point credit cost. And the gross and net NPAs as you mentioned are at decadal lows. And we have not seen any stress at this moment in terms of asset quality in any sector.
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Ritu3:17
Okay, no concern on account of what's happening in West Asia yet. But in terms of credit growth, you've delivered almost 17% for the quarter, and now you're again retaining that 13 to 15% growth for FY27. Where will the bulk of this growth come from, Mr. Setty? Corporate, for instance, has been a bit of a drag. Do you see that picking up? Where is the demand and what is the pipeline visibility you already have?
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Challa Setty3:43
So, the credit growth, as we have witnessed in the last year, is going to be broad-based across the retail segment, agriculture, MSME, and corporate. Corporate, as I mentioned in my press briefing, we have a pipeline of almost 5 trillion rupees — more than 5 trillion rupees. And both in terms of unutilized working capital advances as well as undrawn term loans and also the term loans which are under discussion with the pipeline. We have not seen anyone withdrawing any of the discussion on the capital expenditure what they committed last year. The new capital expenditure programs we have to see as we move forward, but the current pipeline itself gives us visibility in terms of what could be the corporate credit growth, which gives us confidence. And as I mentioned, we are witnessing continued robust credit growth in the current quarter also. So based on that, assuming that this Russia-Ukraine conflict does not linger longer, we are very hopeful and confident that 13 to 15% credit growth is eminently feasible.
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Ritu4:53
Sir, in terms of raising any kind of equity in the year, you of course are going to seek that board approval for debt raise. But on the equity part, I believe you'll have Yes Bank, of course, SBI Mutual Fund, the NSE IPO. With all of that, you might have a windfall gain. So any requirement for further equity capital raise at all?
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Challa Setty5:19
Not at this juncture, Ritu. Even the current CRAR above 15% what we have gives us an ability to fund almost 12 trillion credit growth. And you also mentioned some of the names which definitely augment our capital going forward, and I don't see any reason that we need to access the market.
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Ritu5:39
Got that, sir. So your CD ratio, if I could briefly address, at 82% is a multi-year high for you. Although it's not particularly alarming in itself, the direction has been upwards. If the trend holds into FY27, do you see any kind of constraint on credit growth, or will you be forced to chase bulk or term deposits at higher rates, which in turn could pressure NIMs?
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Challa Setty6:06
So on the ability to fund the credit growth, I did mention about the availability of capital. The second thing is availability of liquidity, and we have almost 3 trillion excess SLR in our books. And with an assumed deposit growth rate of 11 to 12%, I personally believe that we don't have any concern in terms of funding the credit growth.
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Ritu6:32
Got it, sir. Just if I could end with the two E's. ECLGS — have any borrowers approached you? And on ECL, what is the estimated additional provisioning you'll have to make over the next few years?
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Challa Setty6:47
On the ECLGS, the guidelines have just been received. We are all working on operationalizing those guidelines, and it would be widely publicized among our eligible customers. It is an opt-in scheme; the customer has to approach. So far nobody has approached, but once the scheme is in place, we assume that the MSMEs who are in need of funding will come to us. So far nobody has approached. On the ECL front, as I mentioned earlier and I'm sticking to that statement, ECL is not going to really have any major impact because of the smooth transition period which is given by the RBI. We haven't had the clear assessment so far. We are working on the models. There are some final changes which need to be done to the models. I think sometime during Q2, we will have some number available to all of you.
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Ritu7:45
All right, I will leave it at that. Thank you very much, Mr. Setty, for your time. It was a pleasure. Thank you.