FCNR(B) flow won’t make lending ‘axis’ abnormal, asserts SBI chief

MUMBAI: State Bank of India chairman CS Setty on Thursday dismissed concerns that FCNR(B) flows could lead to “abnormal lending”, pointing out that the inflows would be deployed over a period of up to four months.

Setty, who heads India’s largest lender, said bankers would be responsible for deploying the funds of over $127 billion garnered from the diaspora as part of the special concessional swap window from the RBI (Reserve Bank Of India).

“I don’t think (it will lead to abnormal lending), everybody will be more responsible,” Setty told reporters on the sidelines of the annual GFF (Global Fintech Fest) here, replying to a question on whether the inflows will lead to abnormal lending.

Speaking at the same event on Wednesday, the third largest private sector lender Axis Bank’s managing director and chief executive Amitabh Chaudhry had flagged concerns that the FCNR(B) money could lead to some “abnormal lending”.

Setty said the money will get deployed in the next three to four months. He said the RBI’s six-member monetary policy committee is unlikely to go for a rate hike in the next policy review in October.

At the event earlier, Setty said Indian banks have been using artificial intelligence and machine learning tools for many years, and cited SBI’s own pioneering efforts in the area by using such technology inputs for customer services and some lending products as well.

With the age of agentic AI before us, Setty said, “We may need to devise a ‘know your agent’ (KYA) on the lines of know your customer (KYC) guidelines which the banks have adopted. It will be necessary to devise such guidelines...”