"We estimate [credit demand] to be between 16-19%. Earlier, our estimates were between 19-22%. But, with interest rates going up many corporates are reconsidering their plans for expansion," SBI Chairman Pratip Chaudhuri

"Therefore, we expect some slowdown in demand for credit, particularly in long term and term credit for equipment finance," he added.

Chaudhuri said, however, the growth in retail which is pegged at 25% of the total portfolio may remain as estimated.

Replying to a question on the state-owned bank's Net Interest Margins (NIM), he said it was expected to be 3.5%, as against 3.35% in the last fiscal.

Chaudhuri said, "The growth is expected to come in due to the increase in our base rate from 8.5% to 9.25%. Secondly, the home loans that were given at 8% in the first year and 9.25% in the second year have been discontinued. Moreover, corporates are also accepting higher rates of interest. So, the initial trends of NIM are very positive."

Meanwhile, on the net Non-Performing Assets (NPA), at 1.63% as of March 31, he said, "Our objective would be to bring it down at least by 25 basis points in the current financial year."

Speaking on the merger of associate banks with SBI, Chaudhuri said the move costs a lot of money both in terms of capital requirement as well as staff benefits.

He said SBI would think of merging associate banks only next year. The merger of State Bank of Saurashtra happened in 2008, and that of State Bank of Indore in 2010.