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ICICI Bank will grow its unsecured lending portfolio, which includes personal loans and credit cards, albeit cautiously.
Unsecured loans are usually not backed by any collateral and hence considered more risky compared to mortgage loans.
According to Rajiv Sabharwal, Executive Director of ICICI Bank, availability of credit bureau reports have made such lending more secure.
“We will grow that (unsecured lending) business but focus largely on existing customers,” Sabharwal told newspersons on the sidelines of the launch of Vodafone’s mobile money transfer and payment service — ‘M-Pesa’ — here on Wednesday.
Risk of delinquencies since the 2008 economic meltdown has made the bank shrink its unsecured lending portfolio. As per Reserve Bank of India data, credit cards issued by ICICI reduced to 2.84 million in January 2013, from 2.86 million during the same period last year. It stood at 3.19 million as on June 2011.
Outstanding cards, or cards in circulation, have, however, stood at 2.82 million in December and 2.77 million in November 2012. The bank plans to add new cards and grow its business further. “Our Gemstone collection of credit cards is doing pretty well,” he said.
Home Loan
The bank’s scheme of offering one per cent cash back on equated monthly instalments (EMIs) to its home loan customers has been received well, Sabharwal added.
“We have been able to add quite a lot of customers due to this scheme. We will continue to focus on mortgage backed lending,” he said.
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