SBI's Optimism: Navigating Rate Cuts with Confidence

State Bank of India's Chairman, C S Setty, expressed confidence in maintaining a 3% net interest margin despite possible repo rate cuts by the Reserve Bank. Setty highlighted SBI's strategies to manage margins, emphasizing the bank's ability to adapt even with changes in external benchmarks and inflation expectations.

The State Bank of India (SBI) is poised to retain its 3% net interest margin guidance, even in the face of potential repo rate reductions by the Reserve Bank. Chairman C S Setty noted that the bank has strategies in place to uphold this figure, underlining its financial resilience.

In a conversation with PTI, Setty acknowledged the upcoming decision by the RBI as a 'close call,' indicating the bank's anticipation of a potential shallow cut of 0.25%. This decision comes amid the backdrop of cooling inflation rates, which could influence the central bank's course of action in their monetary policy meeting.

With consistent domestic net interest margins and strategic liability management, SBI is prepared for any rate cut scenarios. Setty elaborated on the mechanisms that support the bank's financial stability, such as adjustments in deposit rates and managing assets tied to the repo rate, ensuring a limited impact on overall profitability.

(With inputs from agencies.)