India's largest lender, State Bank of India is projecting a lower loan growth rate of 16 per cent for the current financial year as the demand for advances from the industrial sector is weak.

"...we would like to believe that the loan growth should not be above 16 per cent and deposits growth between 14 and 16 per cent (in 2013-14)," SBI Chairman, Mr. Pratip Chaudhuri said when asked about his projections for the bank in the current financial year.

"...we feel the loan environment is rather weak and hardly any demand in the industrial sector so whatever loan demand is coming is from consumer sector," he added.

He also attributed the expectation of lower growth in advances to the increasing demand from corporate sector opting for dollar loans.

"Dollar loans are becoming cheap. Many corporates who are thinking of long-term loans for their projects increasingly prefer dollar loans. Dollar loan pricing is going down every year but rupee loan pricing is not going down. Demand for rupee loan from corporate sector is weak. Therefore, we are pegging (loan growth) at 16 per cent," Mr. Chaudhuri said.

Last financial year, SBI posted 21 per cent and 15 per cent growth in advances and deposits, respectively.

Mr. Chaudhuri said that SBI will be announcing its financial results on May 22.