Mumbai:
A rebalancing of credit portfolio for channeling advances
to productive sectors of the economy would increase real
estate and personal loans, heads of several banks attending
a meeting called by finance minister P Chidambaram said.
Loan
rates may harden for the commercial real estate sector,
P P Mallya, chairman, Vijaya Bank, said on the sidelines
of the meeting to take stock of the situation arising
out of RBI's decision to hike the repo rate by 0.25 per
cent in its busy season credit policy.
Chidambaram
asked banks to gear up to finance an Indian economy that
would be the third largest in the world in a few years.
"There is only 50 per cent of India's GDP which is
financed by institutional credit. My concern is about
the remaining 50 per cent," he said. "My concern
is also about the growing GDP and how we will be able
to finance it," Chidambaram added.
"Real estate carries higher risks. To the extent
that credit will be channelised to preferred areas, the
rates for real estate may rise little bit," P K Gupta,
chairman, United Bank of India, said. There was a possibility
of a quarter-er cent rise in retail sector loans, another
bank chief said.
Chairman
of IDBI and IBA V P Shetty said there is pressure on deposit
rates. "It is a clear case of asset-liability mismatch,"
he said adding credit growth has been galloping at 30
per cent for three consecutive years. While credit growth
has been really good, deposits have been growing at just
20 per cent, he said.
SBI
chairman O P Bhatt, however, said there was no immediate
pressure on deposit and lending rates. "Our net interest
margin is at 3.2 per cent and we expect it to remain at
that level," he said.
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