With the overall market sentiment improving, how do you expect credit growth to be this year
Credit growth is reported to be 13.5-14% so far this year. However, the same set mid-corporates and retail has contributed to it.
So, its not exactly inclusive growth. For that to happen, you really need some on-the-ground support from the finance ministry and the RBI. My belief is that if other sectors, including infrastructure, get an impetus, growth will automatically happen. The problem is that growth has stagnated for two years.
Retail loan growth has been strong so far. How do you see it, going forward
A lot of retail growth
has taken place due to improved consumption. However, again, its limited to
semi-urban and rural locations. It has to come back to urban households, where it has significantly reduced.
Automobile manufacturers and some retail chains are not really getting the kind of revenues they expected earlier. Now that the stock market is buoyant again and there is hope of reform measures by the new government at the Centre, the retail segment is likely to grow along with others. My belief is that we have a time-frame of 6-9 months on this; the growth in retail loans may happen faster.
What kind of growth are you looking at this year
We are looking at a 20% growth as far as the top line is concerned. We do believe that specific areas, such as two-wheelers where we have a very low market share and also micro and small enterprise and housing loans will be our growth areas.
It will be at least 3-4 years before we become a significant player in the housing finance segment, but we should be able to make a quantum leap this year. Gold is one area where we arent happy, being at 17-18%; we want it to be 20-25% of our book at the least.
We will continue to expand our branches in the northern and western regions.
How will you fund this kind of growth
Nearly 65-75% of our funding comes from banks. There are a lot of bank lines that are still not utilised; therefore, I do not see any constraints on the funding side.
We get rest of our funding from retail deposits. We would definitely look to lower our costs.
With higher credit growth, we expect some impact on bank funding to NBFCs. We have also had an upgrade in ratings from agencies like Fitch and Icra, which will have a positive impact on our borrowings.