Inflation, rates will take time to moderate: Kamath

ICICI Bank managing director and CEO KV Kamath does not foresee inflation and interest rates to moderate in the immediate future.

Addressing the 14th annual general meeting of ICICI Bank in Vadodara on Saturday, Kamath, however, said, he did not see rates shooting up to 17-18% like they were ten years ago.

?In spite of tight monetary measures taken by the Reserve Bank of India in the recent past, lending rates have not spiraled to 17-18% levels ?the scenario we saw a decade ago. It?s a good omen. I do not think the rates would once again shoot to 17-18% in India in spite of inflationary conditions since supply of money is adequate in the system at present,? he said.

Refuting a shareholder?s observations that ICICI Bank has invariably become an international moneylender and the bank?s international operations are exposed to huge risks, post the sub prime fiasco, Kamath said ICICI Bank?s expansion in overseas markets is solely to service the non-resident Indian community as well as

Indian companies that are globalising at a faster pace.

?We have not gone to any foreign market to lend to sub-prime customers or to hold sub prime papers. Sub prime activity would never become the prime business of our international operations,? said Kamath.

Assuaging shareholders? concern over some of the methods used by the recovery agents for handling bad debts in consumer as well as the credit card segments, he said, ?It is very shameful if these sorts of tactics are used by the banks any where in the world. I can assure you that ICICI Bank does not indulge in such practices.?

He said, ?Our bank has around 12 million retail customers and out of them, on an average 2.4 million of them do not pay us back on time. So, we have to take legitimate steps to recover the money.?

Revealing the foreign shareholding break-up of the bank in response to a specific query at the AGM, Kamath said, ?As on June 30, 2008, 28.77% shares of the bank remain issued through ADR route and 38.81% belong to the FIIs. Total foreign holding iis about 68.5% as-on-date.?