MUMBAI: State Bank of India expects credit growth to accelerate in the year beginning in April to as much as 15 per cent, as the economy picks up and the bank begins to work through its bad debt pile, its chairman said on Tuesday.

Arundhati Bhattacharya said in an interview that increased investment from India’s large corporates, including in government auctions of mobile airwaves and coal concessions, would help fuel growth and speed up lending after “very very low” credit growth this year. For the current year ending this month, the country’s largest lender expects credit growth of below 10pc, she said.

“While we have grown slowly on the top line, we have cleaned up our balance sheet,” Bhattacharya said.

“Overall the impact is large, but we are comfortable with this. We believe this was a period of consolidation.”

India’s economic slowdown over the past two fiscal years has dragged banks’ loan growth levels to multi-year lows, while bad debts surged as companies struggled to repay.

State-run SBI, with 215,000 employees, more than 16,000 branches and roughly a quarter of India’s banking assets, was among the casualties and bad loans swelled.

Published in Dawn March 25th , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play