SBI: FCNR liquidity deployment to take 4 months

The State Bank of India (SBI) anticipates that the liquidity generated from a surge in foreign currency non-resident (FCNR) deposits, mobilized recently, will require an additional three to four months to be deployed into loans, according to chairman C S Setty. This deployment of funds, facilitated by the Reserve Bank of India's special swap window, is anticipated to bolster credit growth in the coming quarters.

In August, banks collectively raised a record $127.23 billion in FCNR(B) deposits under this RBI mechanism, bolstering their foreign currency funding position. Setty also stated that he does not foresee an increase in the policy repo rate at the RBI's upcoming October meeting.

SBI is intensifying its utilization of artificial intelligence (AI) across various domains including customer engagement, productivity, and risk management, with a specific emphasis on agentic AI capable of operating with a degree of autonomy. The bank is currently focusing on three key areas: adoption of agentic AI, customer engagement, hyper-personalization, productivity, and risk management.

AI is already being employed by SBI in areas like chatbots, personal lending, credit assessment, cash-flow-based lending, early warning systems, fraud detection, and anti-money laundering monitoring. Moving forward, SBI aims to expand its AI applications to encompass KYC and AML processes, fraud detection, loan appraisal and underwriting, reconciliation, customer service, and complaint management.

According to Setty, AI agents could be deployed throughout the financial lifecycle, potentially enhancing decision-making and reducing response times on the scale at which Indian banks operate.

He also highlighted personalized financial advice as a significant opportunity, suggesting that agentic AI could extend financial intelligence, currently predominantly accessible to affluent customers through wealth management and premier banking, to a much larger segment — potentially hundreds of millions of customers. This broader reach would primarily involve mobile phone and voice-led interfaces.

However, Setty cautioned that the increased autonomy of AI systems would necessitate stronger controls. He proposed a "know your agent" framework, which would encompass agent identity, authentication, consent, transaction limits, and audit trails, as AI systems increasingly engage directly in financial transactions. Setty emphasized that AI in banking should be grounded in three principles: accuracy, accountability, and access without asymmetry, all while maintaining human oversight for complex and high-risk financial decisions.