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Our Bureau

Kochi , Feb. 25

WITH a surge in retail credit to finance the purchase of trucks, three and two-wheelers, IndusInd Bank is poised to take retail credit to 60 per cent of its total credit portfolio.

Addressing a press conference here, Mr Bhaskar Ghose, Managing Director of IndusInd Bank, said that while most banks had been concentrating on home loans to build up their retail credit portfolio, IndusInd Bank had been focusing on two and three-wheeler loans, which had traditionally been the forte of NBFCs and into which few banks had made inroads.

The high processing costs and steep administrative expenses to mobilise an individual credit portfolio of Rs 50,000 had made it prohibitive for most banks to harness the true potential of the sector, Mr Ghose said. But the merger with Ashok Leyland Finance had thrown up new opportunities and a corpus of Rs 2,200 crore of automobile finance to IndusInd Bank.

During the first 10 months of the current year, this had already grown to Rs 3,200 crore. The margins and returns from the sector are far more rewarding than that of home loans or car loans. The net NPA of the sector was less than one per cent and the segment was poised to grow by 20-25 per cent in the next four to five years, Mr Ghose said. This had ensured a smooth transition for the bank, which had been focusing on wholesale credit and to view retail credit in a big way.

Around three years back, retail credit portfolio of IndusInd was as low as 7-8 per cent, which has today grown to almost 60 per cent mainly on account of the surging growth from credit to two and three-wheelers as well as for trucks and buses. This should boost the credit portfolio of IndusInd Bank, which was Rs 7,400 crore last year to Rs 9,500 crore this year, Mr Ghose said.

Mr Ghose is here to open the bank's 10th branch in the State at Kollam tomorrow.

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