Credit growth slower than expected: Bhatt

MUMBAI: The country's largest lender State Bank today said there is some concern regarding the pace of growth of credit offtake, but added the bank expects it to gather momentum as busy credit season begins next month.

"We have estimated credit growth to be around 20-22 per cent this fiscal, but now it is only around 18 per cent. It will be a concern if it doesn't pick up. But we hope it picks up as we enter the busy credit season," State Bank Chairman OP Bhatt told newsmen on the sidelines of the ninth global banking summit organised by Ficci and Indian Banks Association here.

To a pointed query on whether there is a decline in credit growth, Bhatt said, there is no deceleration but it is not growing as the bank expected. However, compared to last year, it is growing, as it was only around 11 per cent this time last year.

When sought his response to Reserve Bank Governor D Subbarao's observation the public sector bank heads need to be paid better to retain talent, Bhatt said, "Badhani hi chaahiye. Obviously, it has to be increased."

Expressing his concern over the low salary structure in PSU banks, the Governor addressing the same banking meet on Tuesday had said due to the poor compensation package, PSBs would lose talent to private sector lenders.

"The executive compensation in the public sector, as is well known, is lower than that in the private sector...If public sector banks are required to compete with private sector banks on a level playing field, there is a good case for compensating them too on a competitive base," Subbarao had said.

While Subbarao takes home a paltry Rs 15 lakh, and Bhatt a tad better at Rs 26.5 lakh annually, HDFC Bank's Aditya Puri gets Rs 3.40 crore and ICICI Bank's Chanda Kochhar draws 2.08 crore a year.

"There is a good reason to revise their compensatory packages...There is also a risk that if the public sector bank's compensation is not improved, the public sector may lose talent to the private sector," Subbarao said.

On attrition at the SBI, Bhatt said, the bank has 2 lakh employees and there are around 8,000 retirements a year and if one looks at the numbers this is only not even 5 per cent.