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India's SBI aims to keep net bad loan ratio under 1%

FILE PHOTO: A man checks his mobile phone in front of State Bank of India (SBI) branch in Kolkata

MUMBAI (Reuters) - State Bank of India, the country's largest lender, expects to sustain its current pace of credit growth while aiming to keep its net non-performing asset ratio below 1%, its top executive said on Wednesday.

After announcing results for the June-September quarter earlier this month, the bank said it expects credit growth of 14%-16% for the current financial year as it steps up efforts to attract deposits.

According to the latest central bank data, as of Nov. 4 Indian banks recorded credit growth of around 17% overall, while deposit growth stood at 8.25%.

"So long as the risk is understood and priced well, there is no challenge (in sustaining loan growth)," SBI Chairman Dinesh Kumar Khara told reporters.

"This time the growth is coming at a time when corporates are deleveraged. That also gives us the confidence that the path we are treading is sustainable."

SBI has a term loan pipeline of 2.5 trillion rupees ($30.6 billion) and expects demand from all sectors, Khara said.

The lender's net non-performing asset (NPA) ratio fell to 0.8% in the June-September quarter.

Khara said the bank hoped to further reduce bad loans, and keep the ratio below 1% going forward.

($1 = 81.7600 Indian rupees)

(Reporting by Nupur Anand, writing by Sudipto Ganguly; editing by Kirsten Donovan)