‘The mood is better due to reduction in tax rates’

Our second quarter numbers were very good, and the proportion of wholesale versus retail was 48 per cent versus 52 per cent. In corporate and business banking together in terms of customer assets, we have crossed ₹3-lakh crore.

We are a universal bank with a wholesale and retail book. We have an established risk parameter, and within that we go out and seek growth. In corporate banking, we continue to seek growth. We are not seeing any elevated stress in the MSME or corporate portfolio, compared to the last one year.

Exports are subdued and private sector capex is muted, but is expected to pick up. Public sector capex is quite strong and consumption has been tepid. The public sector will remain an area of growth.

There is also a lot of push on consumption. As one of the largest banks, we cannot say that we will focus on particular sectors. In any sector, there is always a credit structure that makes the sector bankable. We have also been working with companies such as a two-wheeler player and a global smartphone player that recorded significant sales.

You have to realise that if you only push corporate banking, then maybe you will get stuck. There is an ecosystem. Every corporate needs a certain amount of topline growth, and if we are able to assist together with the full bank, as a one-bank solution, then we get growth in both the consumer and corporate side.

We showed advances growth rate of 19.5 per cent. The semi-urban and rural (SURU) areas have held us in very good stead. Our disbursements in the first half of the fiscal were in the SURU location; this indicates there is potential and we just need to go deeper.

One of our goals in the SME business is to expand the number of districts where we are present. We have retail presence,which is overarching, but we will dramatically increase credit extension in the districts where we are present.

At the beginning of the year, we saw greater capacity utilisation in steel, cement, textile, capital goods and paper and, then, there was a slowdown. But today, the mood is better as there has been direct stimulus through reduction in tax rates, and the chances of capex revival have improved. The second quarter results are not something that point to an apocalypse.

The bank has been supporting NBFCs that are backed by corporates, multinational corporates, public sector, banks, and financial institutions. You will always find pockets within a sector where you will put out very high quality bankable credit in the marketplace. We have continued to support. That is a need.

We operate in the economy and NBFCs extend credit to people where the formal banking system may not reach, and we have to play our part and be supportive.

Our approach is not to just lend if the external rating is great. Ratings can drop sharply. The bank’s philosophy is to do cash flow-based lending. We take a look at the cash generation potential of that entity, and if that is fine and then we decide on lending. That has held us in good stead, rather than relying on external rating or corporate structure.

We have a very strong investment banking team that the corporate bank works with whenever there is a proposal above a certain size, whatever the sector be. That has been built by the bank in the last six years or so, and continues to gain in strength. One has to have a strategy between term and overnight, and we have to balance. We have to have a balanced book. That is the approach of the bank.

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