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— Paul Naronha

Mr K.V. Kamath (left), Managing Director and CEO, ICICI Bank, with Mr Shrinivas Dempo, Chairman, CII Western Region, at the CII HR Summit in Mumbai on Monday.

Our Bureau

Mumbai, Oct 22

Managing the flow of foreign funds into India is a challenge for policy makers, because the flow is still strong despite the proposed ban on participatory notes, said Mr K.V. Kamath, Managing Director and CEO, ICICI Bank.

Answering a question on PN, Mr Kamath said, “The rupee rise was getting to be a challenge and all tools of monetary policy have to be used.”

Speaking on the sidelines of a seminar on HR, in Mumbai, Mr Kamath said that capital flows into the country will be continue to be good because of strong corporate performance and from the growing overseas remittances. It is not only interest rate sensitive, but also sensitive to the India growth story, which is still strong, he added.

About the remittance business, Mr Kamath said it is about $30 million per year and growing at 30 per cent annually.

When asked if ICICI Bank would cut deposit rates, he said they would wait for the monetary policy and signals from the Reserve Bank of India.

Addressing the seminar, Mr Kamath said that India’s 10 per cent economic growth rate, which is primarily driven by knowledge sector, has thrown up a ‘huge skill set issue’. “In India, 60 per cent of the economy lies in the service sector with another seven per cent in relatively new sectors, which are the reasons for this growth. This in turn creates a skill-set issue,” he said.

He cited sectors such as IT, pharma, media and financial services as some of the new knowledge sectors.

Mr Kamath also mentioned that the problem of people-shortage would be a long-term one.

“You can solve the problem of people shortage by working with colleges and universities or you can take people or your roll and train them. In such cases, trade off is simple - curriculum is yours,” Mr Kamath said.

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