Tag: CFO news

“There is a clear availability of demand. Demand (is) coming in and capacity augmentation is happening. And I hope by the end of the current quarter or next quarter, there should be significant improvement in capacity utilisation…The major (capacity addition) is in the iron and steel sector. Oil companies might also start availing working capital limits, and the metal sector is also seeing an uptick, so capacity addition is expected in that sector,” said Dinesh Khara, Chairman SBI in a virtual press conference following SBI’s Q2 financial results.

Khara shared that the lender has currently unutilised term loans to the corporate to the extent of 27 per cent,and while working capital limits in large corporates is unutilised to the extent of 50 per cent. Khara said it is not possible to articulate when corporate book growth will come back but he added he expects unutilised capacity to reduce to roughly 30 per cent in the subsequent quarters.

SBI Chairman also said the lender is not losing any such business to mutual funds due to prevailing excess liquidity in the system, indicating corporates in the present low interest rate environment would prefer banks when scaling up their investments.