Mumbai: State Bank of India chief Arundhati Bhattacharya Monday said state-run lenders' risk-taking during the crisis years is helping private sector lenders report healthy asset growth by "cannibalising" the completed projects.
"Today, why is the private sector going at 22 percent? Because they are cannibalising the completed projects at low cost, as the risks have gone down," Bhattacharya said speaking at the annual Fibac conference here.
She said during the financial crisis, the state-run lenders supported projects by lending, which helped build infrastructure and generate employment.
The SBI chief, however, complained that during the tough times, the private sector lenders stayed out because the risks were too high then.
Bhattacharya was quick to point out that private sector lenders have not been able to cannibalise a large-size lender like SBI, but the smaller state-run banks have suffered.
It can be noted that even as the system's credit growths are coming at a multi-decade lows, some of the successful private sector lenders have been able to report higher credit growths, much of it driven by the working capital requirements of corporates.
Bhattacharya said the state-run lenders supported the economy during the difficult times, given the social mandate that comes with the government capital.
She also sought to dismiss notions that the state-run banks get a lot of capital from the government, pointing out that the support which Chinese banks receive from their government is much larger.
The domestic banks have done a "great job", which has benefitted the country, especially given the low levels of capital that they receive, she claimed.
