SBI forecasts 25 pc loan growth in the current fiscal: Bhatt

Mumbai, July 1 (UNI) The State Bank of India (SBI) is set to achieve a 25 per cent loan growth in this financial year as growth remains strong in Asia's third-largest economy.

Taking charge as Chairman of SBI Om Prakash Bhatt briefed reporters here today that, ''The current scenario is dynamic, and we will continue to focus on retail, small and medium companies, and agriculture.'' Giving the forecast of the Bank's loan growth, Mr Bhatt said the forecast is lower than the 30 per cent SBI achieved in the year to March 2006 but still higher than the central bank's forecast of 20 per cent for the banking sector for the year. ''It (30 percent growth rate) is not sustainable indefinitely. This (forecast) is a good growth rate,'' Mr Bhatt said.

Although there is strong demand for loans from companies to expand capacity and from individuals to buy homes and cars, bankers say rising interest rates could reduce the growth rate this year.

Further, Mr Bhatt said he would work out a strategy plan in the next few weeks for the bank's growth. ''I have a vision. I would discuss it with my top executives and would come out with the plan,'' he said.

Mr Bhatt served in many positions in the SBI group for more than three decades, including as Managing Director at the State Bank of Travancore, one of the seven associate banks of SBI. To fund loan growth and to meet capital requirements, SBI would raise about Rs 25,000 crore in the year to March 2007, he said.

Mr Bhatt said he was watching the Central bank, which is due to review policy on July 25, to take a call on interest rates.

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