Home / Industry / Banking /  No revival in sight for credit demand by India Inc: Khara

State Bank of India Ltd’s new chairman Dinesh Khara on Wednesday said there was no revival in sight for corporate credit demand and that most corporates are now tapping the debt capital market instead. In his first interaction with the media after taking charge as chairman of the country’s largest bank, Khara however said that retail credit is seeing a decent pick up.

“Our retail credit engine is doing quite well. On the corporate side, we have to be mindful of the fact that many companies are not going to the credit market but to the debt capital market," he said. “If we add up our growth in non-SLR portfolio, the (credit) growth would be about 10%. Perhaps, we will have to readjust to new realities and corporate desire. We will have to meet the requirements whether through credit or the investment market," he said.

Khara outlined his top priorities for the next three years, including safety of employees, customers and maintaining the bank’s asset quality.

Like his predecessor Rajnish Kumar, Khara said there was little demand for restructuring loans to beat the covid stress. While he did not comment on the government’s recent move to waive compound interest on loans during moratorium, he said restructuring of accounts will be within manageable limits.

“We are very closely observing the behaviour of people who are showing interest in restructuring. We have created a website (for retail recast), allowing people to come for enquiries. When we look at the hits, that itself is a reflection of people looking at restructuring. I would say that whatever numbers we have seen till now and considering our book, I think it is very manageable. When it comes to corporate restructuring, I think as of now we have not seen many corporates reaching out (to us). There are some. Whatever numbers we have seen, it is nothing very unusual. I would say that it is all within the manageable limits," he added.

On the bank’s capital raising plans, Khara said that the lender is currently on a wait-and-watch mode and will take a call on capital raising depending on the credit pick up.

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