Bankers Expect Private Banks Joining Loan Melas To Spur Credit Growth
Here’s how bankers reacted to the Finance Ministry’s inclusion of private banks in loan melas.
WATCH | Bankers’ Reactions To The Credit Outreach Programme
India’s credit growth will pick up if private banks join their state-run peers in loan melas, according to bankers BloombergQuint spoke to.
While all banks are already seeing demand growing at 15-20 percent, this will make demand even more visible, according to V Vaidyanathan, managing director and chief executive officer of IDFC First Bank Ltd.
Bandhan Bank Ltd. said the melas are a good opportunity for lenders to meet borrowers who fit their criteria perfectly. “In that way, it’s really good for credit growth,” MD and CEO Chandra Shekhar Ghosh said.
Finance Minister Nirmala Sitharaman yesterday urged India’s private lenders to join state-run banks in loan melas in 400 districts, as the government aims to push credit to boost consumption amid a slowdown.
Veteran banker Uday Kotak, who was also present at the meeting yesterday, said the programme will enable private banks to grow their business ahead of the festival season, especially when banks have surplus liquidity.
All other lenders agreed that there’s no dearth of demand for loans or of liquidity. Barring the cyclical issues with the auto sector and the real estate sector, “there’s no problem”, Sanjay Agarwal, MD and CEO at AU Small Finance Bank Ltd., said.
T Latha, MD and CEO at Dhanlaxmi Bank Ltd. said, “We are open to giving any kind of loans which is why we are having a tie up with a couple of people for affordable housing loans as well as for micro finance which is going very smoothly in our bank.”
The bank currently has a credit offtake of 64 percent and expects to reach 68-70 percent in the next three-four months, she said.