SBI deploys AI for Rs 1-L-cr MSME loan underwriting

Mumbai: The State Bank of India (SBI) used artificial intelligence to underwrite nearly Rs 1 lakh crore in MSME loans of up to Rs 5 crore each during 2025-26, highlighting the growing role of AI in banking operations. SBI Managing Director Rama Mohan Rao Amara said the bank was able to underwrite loans for both new-to-bank and existing customers using AI during the year. “In FY26, in 12 months time, we are able to underwrite loans up to Rs 5 crore… Almost Rs 1 lakh crore we were able to underwrite,” he said at the annual FIBAC event here on Wednesday.

AI has helped free up relationship managers, who earlier spent considerable time collecting customer data and conducting preliminary analysis, he said.

SBI is also using AI, including Large Language Models (LLMs), to automate processing of cheques up to Rs 10,000.

Cheques in this category account for around 25 per cent of the bank’s cheque volumes. The AI model can read the cheque, verify mandatory fields and check compliance requirements.

The bank has automated processing of such cheques through a straight-through processing system, with practically no human intervention. SBI, however, has retained a control mechanism under which a dedicated risk unit reviews a sample of AI-processed cheques to identify errors and determine whether the models require further training.