Newly-appointed chairman of the country's largest bank, the State Bank of India, Rajnish Kumar said the bank may reduce interest rates in some basket given the low credit demand. When asked what his fund requirement was over the government's major recapitalisation plan, Kumar said, “We will work out numbers and estimate the capital requirement. But we are better than the Basel III estimate. Given that we account for one-fourth of the banking system, I am sure the government will prioritise our requirement.”
About the country's economic situation, Kumar said, “India story remains intact, which is a view that is shared by everyone. There is no real slowdown in consumption. In manufacturing sector, things can be better. But the government's announcements for the infrastructure sector will give a major boost to employment and given the linkages with other sectors, higher government spending will help a lot of industries. I see major gains for cement and steel. Higher manufacturing activity may not see as much increase in jobs as in the past due to automation, which has reduced the employment potential. But more construction will mean more employment and the sector will have a cascading effect on other sectors.”
