The banking landscape's transformation in the last decade has been driven by technological innovations, changing consumer preferences and emergence of alternative business models, says State Bank of India Managing Director Ashwini Kumar Tewari.
In an interview with Indianbankingnews.com Editor Manju AB, Tewari talks about the banking sector challenges amid foreign strategic investments in Indian banks and the scale up opportunities following the Reserve Bank of India’s (RBI) liberal reforms.
Tewari also talks about retail being SBI’s most prolific segment and the drive to increase the bank’s corporate loan share to 35% of its domestic advances book in the next two years. He elaborates on corporates looking at alternate source of credit such as money market and why banks continue to be well placed as their preferred option for long-term growth.
Edited Excerpts:
Retail seems to be currently driving SBI’s domestic loan book. Will the bank be comfortable if retail loans jump to over 50% of the credit book, like in case of some of the private sector banks?
Currently, we are very much comfortable with our retail book as it is the most prolific segment of SBI, both in terms of deposit mobilisation as well as extending customised credit.
Retail is 37.29% of our total domestic advances as on 30 September 2025, while corporate is having the share of 30.91%.
We aim to have corporate account for 35% of our domestic loan book in the next two years.
Will RBI allowing banks to fund domestic mergers and acquisitions (M&A) improve corporate credit growth?
RBI’s decision to allow banks to fund domestic M&A transactions is a positive step and should support corporate credit growth over time. Earlier, much of this financing was routed through offshore lenders, private credit and bond markets due to regulatory constraints.
With domestic banks now permitted to participate, borrowers gain more funding options, potentially at lower cost, and without the forex and hedging risks associated with offshore debt. This is particularly relevant for consolidation-driven sectors such as infrastructure, energy and manufacturing.
While the pickup may be gradual as banks put in place their appraisal and risk frameworks, the move clearly broadens the scope for well-structured M&A activity within India.
M&A deals in FY24 were valued at over $120 billion, or Rs 10 lakh crore. Assuming debt component of 40% of M&A and 30% of this will be financed by banks, this translates into a potential credit opportunity of Rs 1.2 lakh crore.
How will banks ringfence itself from participating in hostile takeovers?
Indian banks are well regulated and we have credible regulators. Hostile takeovers may not be a concern in the Indian context.
SBI’s market share in home loans is 28% and auto 19.4%. What will be the share for corporate loans?
RBI does not publish any data of market share in corporate loans at present. As per our estimates, our market share in corporate loans is around 25% and we are confident of holding on to this in the near future. We intend to consolidate our position further in the medium-to-long term.
Do you foresee any threat of growing the retail book at current rates, especially in home, car and unsecured personal loan segments?
No, we do not foresee any danger of growing the retail book as there is enough organic demand from our aspirational growing customer base.
From your perch as the head of corporate loans at SBI, do you see more movement coming from greenfield or brownfield expansions?
Credit demand is healthy, supported by strong domestic consumption and policy momentum. We are seeing a robust pipeline of greenfield investments—particularly in renewable energy, oil & gas, data centres, EV and battery-storage (BESS) platforms, hydrocarbon, other new-age manufacturing ecosystems, and large-scale infrastructure—along with selective brownfield expansions in petrochemicals and core industries.
Overall, the investment climate remains positive and aligned with India’s medium-term growth trajectory.
How do you plan to ramp up the corporate loan book this fiscal?
On the corporate loan front, we have a healthy and strong pipeline of Rs 7.29 lakh crore, including sanctioned and at various stages of consideration. We estimate a good chunk of this to be disbursed during the second half of the financial year. We are looking forward to growing better than our estimations in the corporate book.
Overall, we expect our credit growth to cross 12% in FY26, due to the measures taken by the RBI, along with income tax cut, low prices and GST rationalisation, all of which will increase consumption. We believe that there will be sustained consumption demand, which gives an opportunity for us particularly in the retail, agriculture and micro, small, and medium enterprises segments (MSME).
Despite the bank having a corporate loan pipeline of over Rs 7 trillion, why are companies taking time to draw down the sanctioned limits?
Corporate loans have picked up after several quarters of slowdown, and now we are expecting double-digit growth in this segment in the second half of the year.
The corporate loan pipeline consists of two components: loans which are under discussion process; and loans which are sanctioned and yet to be disbursed or are partly disbursed.
Although the pipeline looks steady amount-wise, the components under it keep changing. New proposals are added as being under discussion/process. Similarly, proposals under discussion/process move into yet-to-be disbursed or partly disbursed after sanctions.
We expect good demand in the market as macroeconomic data is showing strength. The recent GST (goods and services tax) rationalisation is expected to increase demand in the market and boost capital expenditure by corporates. As such, we expect robust disbursement.
If you look at SBI’s credit book, corporate loans grew the slowest at 7.10% year-on-year in the September quarter to Rs 12.39 lakh crore. The other loan segments saw double-digit growth during this period. Are companies relying more on non-bank sources of funding such as the bond market?
As on 31 October 2025, the total outstanding credit to commercial sector rose by 13% from 12% last year, with non-bank sources registering a growth of 17.2% compared to 12.4% a year ago.
High-rated corporates do look for alternate source of credit such as money market, where pricing and tenor flexibility often suit their plans better. However, banking sector is well placed as their preferred option for long-term growth.
Are corporates flushed with internal accruals and have other options of raising funds than being over-reliant on bank debt?
Indian corporate balance sheets are quite healthy at the moment. The economy is growing and government is pushing infra and new-age sectors which require capital investments.
Our corporate loan book grew at the rate of 9% in FY 2024-25 and we have expanded by 7% in the first half of this financial year. We have also witnessed significant increase in our sanction pool during this period, a good chunk of which is expected to be disbursed during the 2nd half of the fiscal. As such, the growth looks organic and sustainable.
Is a flood of initial public offerings (IPOs) impacting?
We saw a few of our corporates raising money through the IPO route to comply and support their capital requirements to replace the high-cost debt (from other sources). However, we have not seen any significant adverse impact on our loan book due to the recent IPOs.
Are peers undercutting the market on price for a higher market share in corporate loans?
While competition exists, particularly from peers looking to expand market share, we are not seeing irrational undercutting in the high-quality project finance segment.
What is the single largest corporate loan that the bank has disbursed in the last few quarters?
In the last few quarters, our largest disbursements have been to marquee, large-scale infrastructure and energy projects, including a single transaction of around Rs 13,000 crore to KSK Mahanadi Ltd. This reflects the scale of opportunities in the sector. Most of these exposures are part of well-structured consortium arrangements with disciplined pricing.
How do you see India’s growth story, particularly in wake of the US tariff war?
India’s growth story appears to be doing fairly well. The GDP data for Q2 FY26 at six-quarter high of 8.2%, indicates this. Nominal GDP grew by 8.7% in Q2 FY26, higher than 8.3% growth that took place in Q2 FY25.
The Indian economy has showed signs of a further pick up in momentum, despite lingering external sector headwinds such as the US tariffs. Demand conditions exhibited signs of improvement. While urban demand has seen a revival, there is continued strength in rural demand.
High-frequency indicators for October suggest further broadening of manufacturing activity and continued robust expansion in the services sector.
With the US imposing stiff tariffs of 50% on Indian goods, our products might lose competitiveness versus other Asian competitors. Labour-intensive industries such as textiles, gems and jewelry are expected to face moderate pressures.
However, pharmaceuticals (generic), smartphones and steel are relatively insulated due to exemptions, existing tariff structures and strong domestic consumption.
We do not see any major impact on our loan book in the wake of US tariff. Some realignment of supply chain, causing short-term disruptions in terms of changes in freight cost and rerouting, is also seen.
How do you see the banking landscape in India changing with the increased presence of foreign banks after stake acquisitions by Sumitomo Mitsui Banking Corporation (SMBC) and Emirates NBD in Yes Bank and RBL Bank, respectively?
There has been a transformation in the banking and financial landscape in the last decade, driven by technological innovations, changing consumer preferences and emergence of alternative business models. While these have fostered competition and collaboration, they also have implications for consumer trust and regulatory oversight.
Such structural changes create opportunities as well as challenges. We do not see any major changes due to the presence of foreign banks.
SBI is planning to list two of its subsidiaries, SBI Mutual and SBI General. Will that happen this fiscal?
Regarding SBI Funds Management Ltd (SBIFML), the listing on the stock exchange is expected to be completed in 2026, subject to regulatory approvals and market conditions.
Regarding SBI General, there are no plans for listing as of now.
