The Chairman of the State Bank of India (SBI), CS Setty, remarked on Wednesday that the economic growth trend is expected to stabilize if the Reserve Bank of India (RBI) decides to keep the policy rates unchanged, in light of ongoing inflation issues.
During his address at the Citi 2026 India Conference, Setty noted that market expectations largely favor a pause in interest rate adjustments. The RBI’s Monetary Policy Committee (MPC) is set to reveal its monetary policy decisions on June 5.
“The interplay between growth and inflation is critical. I believe that a pause in rate changes would significantly aid in achieving smooth growth rates,” he stated.
To elevate India to the status of a developed nation, Setty emphasized the necessity of focusing on rural development, urban transformation, investment in human capital (capitalizing on India’s demographic advantages), and fostering globally competitive manufacturing.
As India aims for substantial infrastructure and innovation-driven growth, Setty indicated that banks must adapt by utilizing artificial intelligence for hyper-personalization, incorporating environmental, social, and governance (ESG) factors, and upholding rigorous governance standards. He reflected on how banking has evolved over the past 37 years from manual operations and restricted credit accessibility to a modern, digital banking environment.
He remarked that the banking sector has shifted from merely providing financial services to becoming a vital ally in the nation-building process.
Setty highlighted that a fundamental element of India’s growth is its digital public infrastructure, which includes the JAM Trinity (Jan Dhan-Aadhaar-Mobile) and the Unified Payments Interface (UPI). SBI alone facilitates around 250 million UPI transactions each month, boasting a mere 0.1% technical decline rate.
He pointed out that banking has made finance more accessible, particularly in the microfinance sector where 95% of borrowers are women, thus helping millions escape poverty and enhancing rural development.
Setty expressed his belief in artificial intelligence as a means to boost productivity, noting that SBI is an early adopter of responsible and ethical AI practices to enhance efficiency across its extensive customer base of over 530 million.
He also emphasized that the focus is on Central Bank Digital Currency (CBDC) rather than private cryptocurrencies, highlighting its potential for enabling programmable and targeted direct benefit transfers.
Finally, Setty pointed out that transitioning to electronics manufacturing and the electrification of public transportation, such as Indian Railways, will serve as crucial growth catalysts for the future.
