Consolidation Of Data Sources & Greater Formalization Necessary To Enhance Msmes' Credit Accessibility: SBI Chairman


(MENAFN- KNN India) New Delhi, Jan 11 (KNN) State bank of India Chairman C S Setty has outlined comprehensive reforms needed in India's capital markets, emphasising the importance of expanding the pool of listed companies and promoting spot transactions for improved price discovery.

Addressing the crucial MSME sector, which contributes to one-third of India's GDP and 40 percent of exports, Setty highlighted the need for targeted interventions to address credit information asymmetry.

While acknowledging positive developments such as SME platforms and digital credit assessment systems, he stressed that further consolidation of data sources and formalisation efforts are necessary to enhance credit accessibility.

Speaking at a National Institute of Securities Management event on Friday, Setty warned that the current over-reliance on derivatives could potentially hamper market depth and liquidity, and advocated for a shift from private placements toward open market offerings.

According to his projections, Indian capital markets will need to mobilise Rs 643 lakh crore in equity by 2036 to support economic growth, with specific targets of raising the investment rate to 35 percent of GDP and increasing domestic savings to 33.5 percent of GDP.


The chairman also addressed India's climate finance requirements, revealing that the country needs USD 10.1 trillion to achieve its net-zero goals by 2070, with the power sector alone requiring USD 8.4 trillion.

He emphasised that institutional innovation would be crucial for efficient fund mobilisation, projecting that annual green financing needs could amount to 2.5 percent of GDP.



In a significant proposal, Setty called for the establishment of a dedicated market infrastructure institution to monitor the utilisation of funds raised through equity and debt markets.

This institution would serve to enhance transparency and build investor confidence by ensuring that funds are used for their stated purposes, addressing a crucial aspect of market oversight.

The chairman presented a robust outlook for India's capital markets, noting that the country has positioned itself with diverse drivers to support well-functioning markets. These markets, he explained, will play a pivotal role in channeling domestic savings into long-term investments while reducing dependence on volatile foreign capital flows.


(KNN Bureau)

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