As the economy expands, the banking sector has a significant role in financing infrastructure, enterprise, innovation and the broader transformation of the productive economy, said C S Setty, chairman of State Bank of India (SBI), at its Banking and Economics Conclave.

Speaking at the 13th SBI Banking and Economics Conclave 2026, Setty said that, despite the challenging external environment, real GDP grew by 7.8 per cent during the April-June quarter of 2026, supported by strong domestic demand and gains in manufacturing and services.

He said the financial sector had reinforced the momentum, and the banking system’s health was at a once-in-a-decade high, with robust profitability and credit demand, and improving asset quality providing greater capacity to support the investment cycle.

According to the latest data from the Reserve Bank of India, bank loans were growing at 19 per cent year-on-year at the end of August, while deposit growth was at a 16-year high of 17.8 per cent. The asset quality of commercial banks has improved over the years, with gross non-performing assets at a multi-decade low of 1.8 per cent.

Setty said the resilience demonstrated by the financial system through successive global and domestic headwinds had strengthened the sector’s ability to participate in the next stage of economic expansion. “Moving from being an emerging economy to becoming a leading economic force requires us to look beyond the strength of the present cycle,” he said.

“The next wave of global investment is likely to be shaped by areas such as sunrise sector, renewables, mini-condensers, battery storage, green hydrogen. India has a lot of talent, entrepreneurs, and technologically capable individuals to participate meaningfully in these areas. The larger opportunity lies in translating these strengths into businesses, technologies, manufacturing capabilities, and intellectual property that can command a global footprint. This is also where the financial sector has an important role to play,” Setty said.

As the economy moves towards higher-value manufacturing, new technologies, the green transition and globally competitive enterprises, the back-end science and systems will need to evolve alongside it, providing an advanced architecture that enables innovation in the supply chain, he added.