ET@Davos: Private investment to rebound once tariff disruption settles, says CS Setty, Chairman, SBI

State Bank of India (SBI) Chairman Challa Sreenivasulu Setty reckons private investment may see a broad-based rebound once the US tariff disruption settles down. In an interview with ET’s Deepshikha Sikarwar on the sidelines of the World Economic Forum in Davos, Setty said there was space for further consolidation in the public-sector banking space while underscoring that SBI doesn’t need to grow inorganically. The bank, he said, is focusing more on leveraging AI to further bolster efficiency. Edited excerpts:

SBI’S GROWTH AND FOCUS AREAS

I think SBI’s story is intertwined with India’s growth story. Consistently, SBI has been growing 2-3 percentage points more than the nominal GDP. On the balance sheet side, 11-12% growth should definitely be SBI’s aim. As I keep saying, we add almost one SBI every six years.

We are focusing more on how we can better leverage technologies, especially the new ones such as artificial intelligence, which are going to increase efficiency of our operations and also productivity of our physical outlets.

ASPIRATION TO BE AMONG TOP 20 GLOBAL BANKS
The first strategy is to ensure what needs to be done in a particular micro-market — it could be on the product side, or on the process side, or on the technology side. It could even be about opening more branches in those areas where we don’t have major physical presence yet.

Secondly, the digital push would help us operate with efficiency. And this efficiency gain will also help us deploy our manpower in a meaningful manner for further market share acquisition.

CONSOLIDATION IN PUBLIC-SECTOR BANKING SPACE
I believe there is room for further consolidation in the public-sector banking space. The timing and which bank is merged with which other bank — that’s the call that is finally taken by the government. As far as SBI is concerned, I don’t think we need to grow inorganically. SBI is growing at 10-11%, which means that we are adding business worth Rs 10 lakh crore every year. And even if you take 3-4 (key) minor banks and merge them with SBI, it doesn’t add up to Rs 10 lakh crore. So, we have the potential to grow organically. I don’t think SBI is a party to this consolidation, hopefully.INTEREST RATE CUTS AND IMPACT
Our in-house view is that there would be a pause (in rate cut) in February. If there is a pause, I think the exit margins for March 31, 2026, will be broadly protected. As for CASA deposits, I see savings accounts holding up. What is not holding up is the current account. The current account balances predominantly used to come from the government, and the government is now implementing just-in-time cash management. So, we need to focus on business current accounts.