State Bank of India’s home loan portfolio has crossed 9 lakh crore and the RAM (retail, agriculture and MSME) segment will drive its credit growth to an upward revised 14% in the current financial year.

"We have revised our credit growth guidance from 12% to 14%. We see a robust credit growth, particularly from the RAM segment. MSME is almost growing at 17-18% and agriculture and retail is around 14%," SBI chairman CS Setty told news agency PTI.

The bank’s mortgage loan portfolio crossed the Rs 9 lakh crore last month, he added. As of 30 September, the home loan segment stood at Rs 8.80 lakh crore.

The guidance on corporate credit would be in lower double digit, Setty said.

The corporate demand for bank loans has been sluggish for some time now. Despite a strong sanctioned pipeline, SBI's corporate loan book grew at 5.7% and 7.1% year-on-year during the fiscal’s first and second quarters, respectively.

The bank is witnessing good growth in gold loan while express credit, which is unsecured personal loan, will have double-digit growth, Setty said.

Earlier, Setty said the bank would achieve its 3% net interest margin guidance even if the RBI decides to cut the repo rate by 0.25% in its December monetary policy review.

On 5 December, the RBI announced a cut in the key policy rate by 25 basis points to 5.25% and retained a neutral stance. The move is expected to make loans cheaper and drive demand for fresh credit.

The SBI chairman had earlier told PTI that the bank may not need equity capital to drive credit growth and maintain a capital adequacy ratio of 15% over 5-6 years.

Setty said that Rs 25,000 crore equity capital raised through the qualified institutional placement (QIP) route earlier this year would support credit growth of Rs 12 lakh crore while maintaining a capital adequacy ratio of 15% over the next five to six years.

"Even before this QIP was raised, our ability to fund credit growth has never been a problem. We wanted to strengthen the capital ratios, so we have. Our long-term strategy is to maintain CRAR at 15% and Common Equity Tier 1 at 12%," the chairman said.

This kind of Capital to Risk Asset Ratio (CRAR) gives the bank the ability to fund advances over Rs 12 lakh crore, Setty said.

"With a profit rate like what we have today, if the same profitability is maintained for another 5-6 years, we may not require any capital raising, at least on the CET 1 part," he added.