State Bank of India's CHAKRA Initiative
The State Bank of India (SBI), the largest lender in India, has launched CHAKRA — a Centre of Excellence (CoE) focused on financing sunrise sectors crucial for India's economic transformation.
Investment and Economic Potential
- The potential investment in these sectors, including both debt and equity, is estimated to be around Rs 100 trillion over the next five years.
- Sunrise sectors include:
- Renewable Energy
- Advanced Cell Chemistry and Battery Storage
- Semiconductors
- Decarbonization
- Smart Infrastructure
- Data Centre Infrastructure
Financing Strategy
- SBI Chairman, C S Setty, mentioned that the bank estimates a lendable opportunity of approximately Rs 20–22 trillion in these sectors over the next five years.
- The bank intends to adopt innovative funding structures beyond traditional debt, such as mezzanine financing and other capital structures.
Collaborations and Partnerships
- SBI has signed memoranda of understanding (MoUs) with 21 financial institutions to work collaboratively through CHAKRA.
- Partners include Japanese banks like SMBC and MUFG, and domestic lenders such as PFC, REC, and NaBFID.
- SBI is also exploring potential tie-ups with European and American banks.
Challenges and Opportunities
- Setty emphasized the need for patient capital structures, as capital cannot be solely derived from deposit-driven asset build-up.
- He highlighted the stability brought by existing sticky deposits, particularly savings and retail term deposits, though he underscored the importance of involving other financial institutions in infrastructure investments.
Outcomes and Goals of CHAKRA
- CHAKRA aims to produce white papers, sector reports, knowledge series, and facilitate industry roundtables and policy dialogues.
- The Centre seeks to engage with development finance institutions, banks, NBFCs, industry bodies, academia, and policy think tanks.
- SBI aspires to bolster innovation-focused enterprises and enhance capital flow to sectors pivotal for a sustainable and tech-driven future.
