Great Potential For Banks In India: Kochhar
ABPABPABP
davos diary

28 Jan,2013 14:57 IST

Great Potential For Banks In India: Kochhar

ICICI Bank's CEO also said the country's financial services sector, including banking, has got tremendous growth potential for the next few years
TEXT SIZE : A | A | A

Dismissing concerns of high corporate debt exposures posing possible default risks to banks in India, top banker Chanda Kochhar has said loans have been mostly given for projects in investment phase and leveraging won't appear high once companies start generating cash flows.
 
Kochhar, MD and CEO of India's largest private sector lender ICICI Bank, also said the country's financial services sector, including banking, has got tremendous growth potential for the next few years.
 
Besides, she added, there will be great opportunities in the economy and its global linkages through Indian companies' overseas expansion activities.
 
"While there has been concern over high leverage in some segments of the corporate sector, the debt levels have to be seen in the context of the fact that many corporates are in an investment phase," Kochhar told PTI in an interview, at the the annual meeting of the World Economic Forum here.
 
She said the companies' debt leverage would appear high only until the investments are completed and start generating cash-flows. "As the cash flows from the projects start, the debt levels will be sustainable and should moderate over time.
 
"What is important currently is to ensure that the projects under implementation get the necessary last mile clearances and linkages to ensure that the assets become productive on schedule."
 
Asked about her outlook for the Indian banking and financial sector, Kochhar said: "First of all, I would say that the Indian financial sector has tremendous growth opportunities over the next few years.
 
"The banking sector should grow at least 2.5 to 3 times the gross domestic product (GDP) growth rate, and the improvement in the GDP growth rate will drive growth in the banking sector.
 
"Secondly, India's growing global linkages, whether in terms of international companies investing in India or Indian companies going overseas, will provide a growth opportunity for Indian banks.
 
"Thirdly, the penetration of financial services in India is low and we can achieve significant growth by increasing this level of penetration."
 
She said the growth for the banking sector has moderated over the last two years, but a recovery in economic growth and in the investment cycle should support higher growth for the banking sector as well.
 
(PTI) 
 

1
1 Pages
Back To Top