Bank slump may go on for 2 yrs: ICICI Bank ED

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Mumbai, Sep 26: ICICI Bank executive director V Vaidyanathan has said that the current slowdown witnessed in the Indian banking space could continue for the next 18-24 months. He said, “The global economic turmoil is yet to settle down. The extent of contamination of the latest developments in the US across Asian markets is not yet exactly known and not well understood also.”

“Since most Indian banks including ICICI Bank have already tightened their credit norms and the retail borrowers too are currently not opting for huge amount of loans across various segments, the credit off-take has relatively slowed down in the last quarter of the current fiscal. This slowdown is mainly correlated to parameters like inflation and high interest rates, and thus, the weakening demand for certain kind of goods and assets. Mortgage loan business also witnessed a considerable slowdown as sales in the property market have dipped in the recent past,” said Vaidyanathan.

He said that contrary to the phenomenon earlier, retail customers now a days are trying their best not to take bank loans by putting personal equities in their buy transactions as much as possible. It’s a paradigm shift witnessed in the retail borrowers’ behavior that is restricting the banking system’s retail credit growth currently. ICICI Bank intends to prune its current retail credit exposure in a bid to size it down at par with the bank’s present loan exposure to the corporate sector in India.