Now Reading: SBI uses AI to underwrite Rs 1 lakh crore in MSME loans in FY26
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SBI uses AI to underwrite Rs 1 lakh crore in MSME loans in FY26
State Bank of India has used artificial intelligence to underwrite nearly Rs 1 lakh crore in MSME loans of up to Rs 5 crore each in fiscal year 2026, SBI Managing Director…
The Story in Brief
State Bank of India has used artificial intelligence to underwrite nearly Rs 1 lakh crore in MSME loans of up to Rs 5 crore each in fiscal year 2026, SBI Managing Director Rama Mohan Rao Amara said at the FIBAC 2026 event in Mumbai. The bank has also fully automated processing of cheques up to Rs 10,000 through a straight-through processing system, covering about 25% of its cheque volumes. No human agent is involved in that process, though a control risk unit reviews a sample for errors.
AI is deployed across credit underwriting, portfolio management, fraud risk management and customer service. Amara said the AI-led underwriting uses GST data, bureau scores and account information. He added that the model has helped lower NPAs in the underwritten portfolio. In customer service, AI has moved from assisting agents to directly handling calls. The bank is also using AI-based early warning signals to spot vulnerable exposures before delinquency emerges.
The Indian Opinion
Some commentators paint AI as a job-slashing black box, but SBI’s announcement shows a more measured reality. The bank has kept a control risk unit to sample AI-processed cheques and says the model cut delinquency, not headcount overnight. The real test lies ahead: can other public-sector banks match SBI’s scale without the same data depth? Watch the NPA numbers on this AI-underwritten portfolio in the next two quarters, that will separate hype from lasting credit discipline.
Sources (2): bfsi.economictimes.indiatimes.com, thehindu.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
