SBI Chairman: Securitisation Key to Combat Slowing Deposit Growth

• SBI Chairman CS Setty advocates for greater securitisation to address the irreversible trend of household savings shifting from bank deposits to other instruments.
• Setty highlights the unsustainability of a 5-6 percentage point gap between loan and deposit growth for the banking system.
• He notes that in India, 99% of bank balance sheets are deposit-built, compared to 65-70% in Western countries, emphasizing the need for a stronger securitisation market.
• The interview also details the narrowing performance gap between private and PSU banks, attributing it to benign asset quality, market share gains, and better liquidity ratios for PSU banks.
• Setty credits the government's E.A.S.E. program and the 'recognise, resolve, recapitalise' strategy for the significant improvement in PSU bank performance.