80000The country now has another monthly economic index, with State Bank of India on Tuesday launching a tool that will primarily track manufacturing activity to offer a forward-looking economic trends. The SBI Composite Index rivals the existing data point from British lender HSBC.
The SBI index has been developed on the basis of the bank’s internal loan portfolio, which mirrors the credit demand in the country, and other data sets available in public domain.
“The index will analyse data from manufacturing and services industries to determine expansion or contraction in the economy,” SBI Chairperson Arundhati Bhattacharya told reporters here while announcing the product. The bank has created two indices — the SBI Monthly Composite Index and the SBI Yearly Composite Index. Both fulfil complementary purposes such as month-on-month sentiment movement and year-on-year growth forecast, respectively.
The index would also take into account other indicators of economic activities such as consumer spending, mining, interest rates, inflation and exchange rates on a monthly basis. The indices would be released every month post-RBI’s credit growth numbers, she said, adding the data collection would not be outsourced as was the case with the HSBC data.
Oommen A. Ninan adds:
Lending rates can be cut when credit picks up
Ms. Bhattacharya said a cut in lending rates were possible when “little bit more of pick up would take place in credit.”
She also said the Reserve Bank of India should signal the market with a deeper cut in policy rate for banks to reduce lending rates.