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Mumbai : State Bank of India (SBI) chairman Dinesh Khara on Friday made a big statement about the declining number of deposits. For some time now, the gap between deposit and loan growth was increasing, which was being raised about concern. Amidst this growing concern, the country's largest lender SBI has said that low deposits are not a challenge for them, because they know that their institution is capable of supporting the growth in advances.

Khara told reporters here that the bank is withdrawing a part of its excess investments in government securities to arrange for the resources required to support loan growth. Deposit growth has been lagging credit growth for the banking system for almost two years now. The largest public sector bank SBI is also witnessing a similar trend in its business.

There is no challenge before us

Some experts believe this is due to savings flowing into high-yielding capital market options, while SBI's own researchers have called these concerns a 'statistical myth'. When asked about this, the SBI chairman said, “We are in a position to support the growth in our loan book well. As long as we can support loan growth well, I don't think we have any challenge.”

Investment of more than Rs 16 lakh crore

He said the bank has investments of over Rs 16 lakh crore, and is removing a part of the excess statutory liquidity ratio (SLR) to support loan growth.

Lagging behind loan growth

The number of deposits in the banking system has been declining for the last 2 years and is lagging behind the loan growth. State Bank of India is one of the largest public sector banks. According to the trends released by this bank, its trend is also showing the same trend.

(With agency input)