The country’s largest lender has already raised around $6 billion through the FCNR(B) route since 8 June, with most of the traction coming from the United Arab Emirates. SBI does not intend to raise rates on these deposits further, Setty said, citing strong mobilisation and good visibility on further inflows.
The bank’s FY27 NIM guidance remains unchanged at 3%, in line with the June quarter’s actual NIM of 3%, up from 2.93% in the preceding quarter and broadly steady against 3.01% a year earlier. Setty said he does not expect the deposits to have either a significant positive or negative effect on margins.
SBI reported a net profit of ₹21,121 crore for the June quarter, up more than 10% on year and over 7% sequentially. Net interest income rose almost 15% on year and 6% on quarter to ₹46,992 crore. Shares closed at ₹1,097.20 on Friday, August 7, up 1.1%.
Setty said that as long as FCNR(B) flows are adequate to cover credit growth, the bank will not be aggressive in pricing bulk deposits. Large banks able to mobilise dollar deposits at scale will, in turn, reduce their bulk deposit rates, he said.
On capital, SBI does not plan to be aggressive in raising Additional Tier-I or Tier-II capital in FY27. Setty said the bank’s excess liquidity and a targeted 10-11% deposit growth rate would comfortably fund credit expansion. Excess SLR-eligible securities stood at ₹3,09,000 crore as of 30 June, a figure Setty expects to rise to around ₹4,00,000 crore once FCNR(B) flows come in. The bank raised ₹4,691 crore via perpetual bonds in July at a 7.75% coupon and has no current plans to tap external commercial borrowings.
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SBI guides 14-15% loan growth but flags slowdown in H2 credit demand
SBI is targeting credit growth of 14-15% and deposit growth of 10-11% for FY27, Setty said. The bank posted credit growth of nearly 19% on year and deposit growth of close to 10% on year in the June quarter, which Setty attributed mainly to a low base.
The current pace of credit growth is likely to continue into the September quarter, Setty said, but is expected to moderate on year in the December and March quarters because of a higher base effect.
The bank’s corporate credit pipeline stands at ₹3,58,000 crore, and corporate credit growth continues to be robust, Setty said. SBI remains cautious on auto loan pricing amid muted growth in the segment; Setty said the bank was not satisfied with its current pricing and, with competitors pricing aggressively, would review its strategy.
Setty said SBI has headroom to take its credit-deposit ratio up to 80% without straining its funding position. The bank is targeting a cost-to-income ratio below 50% in FY27, against 46.71% in the June quarter (47.71% a year earlier). It is also targeting a return on assets of 1% and return on equity of 15%, against 1.11% ROA (1.07% a quarter earlier) and 17.87% ROE (19.70% a year earlier) in the June quarter.
Does not expect repo rate hike in 2026 and sees no increase in deposit rates going forward: Setty
Setty said the Reserve Bank of India is unlikely to raise the repo rate in 2026, and the bank does not foresee an increase in deposit rates going forward. He said the banking sector has seen some moderation in margins, though liquidity and asset quality across the system remain comfortable.
The global economy continues to operate under heightened uncertainty, Setty said, but India’s economic resilience continues to stand out against this backdrop. Credit growth has accelerated across key sectors, he said, supported by healthy demand from retail, MSME, agriculture and industry.
The bank is adopting artificial intelligence across all facets of its operations and will continue strengthening its deposit franchise, Setty said. El Niño remains a key monitorable for rural consumption, though it is too early to assess its impact and it may not pose a significant asset-quality concern, he added.
On other business lines, Setty said SBI will not dilute its stake in SBI Funds Management Ltd further, having already sold a 10% stake, and has no plans to list any other subsidiaries. Under the government’s Emergency Credit Line Guarantee Scheme 5.0, aimed at businesses affected by the West Asia conflict, SBI has sanctioned loans worth ₹32,570 crore and disbursed ₹25,440 crore.
Also Read: SBI confident of sustaining strong growth, says Chairman CS Setty; no capital raise planned
