'Robust Growth To Be Seen In Home Loan Segment': SBI Chairman CS Setty On RBI Rate Cut News

Yeah, thanks for having me on your show. I think the front loading of rate cut of course broadly was anticipated by SBI's house view may not have come as surprise to us but obviously 1% CRR cut is a pleasant surprise that would definitely improve the liquidity and also provide a stand taken by the RBI that a durable primary liquidity continues to be available to the banks. Which means that the banks can redefine the interest rate regime what they have both on the deposits and lending rates. While CRR as I was mentioning may not mathematically translate into any rate lending rate adjustments or deposit rate adjustment but the mere continuous availability of liquidity is a great enabler for the banks to really take a call on the transmission of the rates.

So the demand currently is varying at various sectors. You know if you see within the retail personal loans, we have been having a robust growth in the home loans. I'm sure further impetus is given to the home loan because it's a long-term product and interest rate generally have a positive impact. Reduction in interest rate will generally have an impact on the home loan borrowers which means the home loan growth rates will continue to be robust. That is one. The second category of retail personal loans particularly on the unsecured loan segment it was kind of muted in the last several months. I assume that the very fact that the interest rate softening particularly overall liquidity position also is helping us to look at the interest rates and also the very fact the governor has mentioned that the pain on the unsecured personal loan broadly is addressed. We are also while we our unsecured personal loan portfolio is completely different from the industry but we understand from the industry that this particular segment is behaving properly now. So that will help both on the unsecured personal loan and home loans to grow in the retail personal and corporate segments. Yes, I think we have seen a muted growth in the corporate segment. They, the consumption which is going to be driven both by the softening interest rates as well as the tax rate cut up to 12 lakh rupees is going to put some better liquidity in the hands of the people and improve their NMI EMI profiles. So this is also another reason why I believe that the consumption will drive capital expenditure maybe some of the deferred capital expenditure will be frontloaded.

So the current action itself shows that India is almost the central bank has decoupled itself from the overall Fed actions and I think it's driven more by the central bank's focus or maybe the refocus on growth. I think the stance is very clear, they are emboldened by the fact that the inflation is moderate and below 4%, which gives room for them to be aggressive on the rate cut. So in a way you're right. I think most of these economies are taking an independent view away from the Fed. Sir,