SBI Chief Sees Rate Pause Supporting Stability, Urges Focus Beyond Market Swings

State Bank of India (SBI) Chairman C. S. Setty has backed a pause in policy rates by the Reserve Bank of India (RBI), saying such a move could help maintain stability while supporting economic growth. His remarks came ahead of the RBI Monetary Policy Committee’s (MPC) policy decision announced on June 5.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Speaking at the Citi India Conference in Mumbai, Setty said market participants were broadly expecting the central bank to keep interest rates unchanged. He noted that inflation trends remain an important consideration for policymakers, but added that a pause in rates would help stabilise conditions and support a smooth growth trajectory for the economy.

The RBI’s six-member MPC subsequently kept the repo rate unchanged at 5.25% and retained its neutral policy stance.

Long-Term Economic Story

Setty urged investors to assess India through the lens of long-term structural changes rather than short-term fluctuations in equity benchmarks. He said the country’s progress has been shaped by reforms in banking, digital infrastructure, financial inclusion and infrastructure development.

Addressing investors, he said India continues to present opportunities despite global uncertainties linked to geopolitical developments, shifting supply chains, technological changes and evolving capital flows.

He identified digital public infrastructure as one of India’s major achievements, particularly the growth of the Unified Payments Interface (UPI). According to Setty, UPI currently processes nearly 20 billion transactions every month, with SBI handling close to 30% of the volume. He added that the platform’s technical decline rate remains around 0.01%.

Financial Inclusion And Investment Needs

Setty said the combination of Jan Dhan accounts, Aadhaar and mobile connectivity, along with the Direct Benefit Transfer (DBT) framework, has significantly expanded access to financial services and welfare delivery.

He noted that access to credit has widened across customer segments, including rural households and women borrowers. He also underlined the banking sector’s role in financing large infrastructure projects across highways, airports, logistics networks, metro systems and renewable energy developments.

According to SBI’s internal assessment, India may require incremental investments of nearly ₹200 trillion by 2030, followed by an additional ₹450 trillion across sectors such as infrastructure, manufacturing, energy transition, urban development, MSMEs and innovation.

AI Adoption And Credit Demand

Setty also highlighted artificial intelligence as a major opportunity for the country. He said India could emerge as one of the world’s largest adopters of AI technologies, supported by its scale and diverse use cases. He added that SBI has already implemented responsible AI practices and sees AI-driven personalisation becoming increasingly important in banking.

On lending activity, Setty said credit demand remains healthy across segments, particularly among small and medium enterprises. He also confirmed that SBI is working with domestic and international lenders on merger and acquisition financing opportunities, with one transaction already completed and another currently underway.
The comments come as policymakers and investors are closely watching economic growth, inflation trends and capital investment needs in a changing global environment.