Banking on Relief: SBI MD Advocates for CRR Cut to Boost Lending Amid Low Deposit Growth

SBI Managing Director Ashwini Kumar Tewari emphasized the potential benefits of lowering the cash deposit ratio (CRR) for banks struggling with low deposit growth. He clarified that SBI itself doesn't need a reduction but acknowledged ongoing conversations about it. Tewari highlighted the pressure on banks due to lagging deposit growth compared to loan growth.

SBI Managing Director Ashwini Kumar Tewari highlighted the potential advantages of decreasing the cash deposit ratio (CRR) to support banks facing low deposit growth on Monday. Tewari clarified that SBI, the nation's largest lender, does not require such a reduction as it maintains strong liquidity.

Addressing reporters at a Careedge event, Tewari mentioned that while there's been no formal request for a CRR cut, discussions on the matter continue. He stated that lowering the CRR could aid banks in bridging the ongoing gap between credit and deposit growth, a concern amid competitive lending practices.

Tewari noted the significant pressure on banks' funding needs, with deposit growth lagging behind loan growth consistently. He urged for regulatory interventions and long-term measures, such as transitioning to an expected credit loss-based provisioning system, to ensure financial stability as the banking sector thrives.

(With inputs from agencies.)