Borrowing cost still stressful: FM

Mumbai : Union Finance Minister Nirmala Sitharaman on Monday said bank interest rates are very stressful for some people, and steps are needed to make them affordable. Amid widespread concerns about a possible slowdown in economic growth, the Union Finance Minister assured that the government is fully aware of the domestic and global challenges, and added that there is no need to have ‘undue concerns’.

“What is important is when you look at India’s growth requirements, and you can have so many different voices coming out and saying the cost of borrowing is really very stressful, and a time when we want industries to ramp up and move to build capacities, bank interest rates will have to be far more affordable,” Sitharaman said.

Speaking at the annual business and economic conclave organised by SBI, the minister also asked banks to concentrate on their core function of giving loans and added that the ‘misselling’ of insurance products also indirectly adds to the cost of borrowing for an entity.

SBI to open 500 more branches in FY25

Finance Minister further said SBI will open another 500 branches to take its overall network to 23,000 by the end of FY25. Speaking at an event to mark the 100th anniversary of the state-owned lender's main branch in Mumbai, Sitharaman recalled that the size of the bank has increased substantially since 1921 when three presidency banks merged to form the Imperial Bank of India (IBI). The government passed an Act of Parliament to form SBI in 1955 out of what used to be IBI, and what was a network of 250 branches in 1921 has grown to 22,500 now, she said.

“SBI today has grown to become 22,500 branches, and I understand that another 500 branches are going to be opened in FY25. So, 23,000 branches,” Sitharaman said.

The finance minister said this growth of SBI should be a ‘global record’, particularly in the context of India being repeatedly ‘taunted’ for income disparities. She said SBI commands a 22.4 per cent share in the overall deposits in the country, nearly one-fifth in advance and serves over 50 crore customers. Sitharaman said the digital investments are robust at the bank, and it can handle up to 20 crore UPI transactions a day.

This is a long way from the objective of the merger of three presidency banks in 1921, Sitharaman said, pointing out that one of the stated aims of the century-old consolidation move was to extend banking services to people.