Bank heads do not see interest rate hikes hurting interest demand


Mumbai Bankers Does not appear to have bounced Inflation And Interest rate Hurts Credit growth During the current financial year. Most banks expect lending to grow in double digits in FY23, much faster than in FY22 when lending growth slowed due to the epidemic.
“Working capital loan limit has increased from 50% to 56% in the last quarter. Going forward, we have visibility of advances of Rs 4-6 lakh crore, taking into account the limit of unused working capital, unused term loans and proposals in the pipeline, ”he said. State Bank of India Chairman Dinesh KharaWhile announcing the bank’s results on Friday.
According to Khara, the bank has conducted a study which shows that the cost of funds for corporate varies from 8% to 15%, but more than interest rates, corporate performance is influenced by demand which determines production level and capacity utilization. “In the event of inflation, it is in the interest of the borrower, whether corporate or retail,” he said.
Other banks also expect lending growth to be better than FY22, though RBI Liquidity was to be withdrawn and interest rates were to be raised. “We saw rapid growth in corporate loans last year, and the growth was mostly from retail, up 17%. We expect the fastest growth from retail and personal loans and auto loans that will grow in teens. Corporate loan growth will be a bit low, but I hope it will be better than last year, “he said. Bank of Baroda MD and CEO Sanjeev Chadha.
“When you look at the RAM (retail, agriculture and MSME) sectors, interest rates do not affect credit growth. Corporates have other ways to raise funds and there could be a slight impact if lending rates rise. But if interest rates rise across the board, I don’t see a 50-100-basis-point (0.5-1 percentage point) increase in corporate demand, “he said. Union Bank of India MD and CEO Rajkiran Rai.
Punjab National Bank MD and CEO Atul Kumar Goyal He said there is good demand in steel and cement industries and many road projects are coming up. “The growth of the last two years has been different because of Kovid. We believe that in FY23, we should be in a position to achieve double-digit growth of 10%. We expect the housing and personal loan segment to grow by about 15%, “Goyal said.
Bonding Bank, which has a large stake in the microfinance business, has seen an improvement in storage efficiency with the reduction of epidemics. “We are now well on the road to recovery, and the operating environment and ground realities favor a strong resurgence of business. I have visited the field and talked to people and they are coming back to credit demand. Storage efficiency has returned to normal, “he said Bond bank MD CS Ghosh.

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