Witnessing a surprise surge in retail and small & medium enterprises (SME) loan growth in the fourth quarter, State Bank of India (SBI) today raised its forecast for credit growth in the current financial year to 21 per cent from the earlier estimate of 18 per cent. Chairman Pratip Chaudhuri said the sharp rise in advances (disbursements) was a combination of year-end rush and lag effect of substantial lending rate cuts.The country’s largest lender had drastically cut lending rates by a little over 100 basis points during the second and third quarters on retail (auto and home), micro, and SME loans. It has also been aggressively taking over home loans from other banks. The bank had substantially cut lending rates for home, auto, micro, and small and medium enterprises.

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