As far as the Budget is concerned, it has given clear signals in terms of what the government expects to see on the NBFCs side, Chaudhry states.
Amitabh Chaudhry, Managing Director and CEO, Axis Bank speaks to CNBC-TV18 about the resolution taken by the Bank to raise capital at an opportune time.
"We have not said that we are raising capital, the only thing we have said is that we are taking an enabling resolution to look at raising capital when the right opportunity arises," Chaudhry said on July 11.
"Capital can be raised for a number of reasons. It can be raised to ensure that the overall capital ratio is at the right level. Capital can also be raised for growth and so this is just an enabling resolution to ensure that we are ready when the timing is right and the market is ready to give us money," he added.
When asked if one can assume the capital was being raised for any likely inorganic acquisition since the bank was already well capitalised, he said, "You should not assume anything. Our capital is on the lower side in comparison to some other banks. This is just an enabling resolution and it just allows and gives us the flexibility to raise capital as any of the opportunity arises."
"We are not saying that it is related to any particular opportunity," Chaudhry reiterated.
According to him, some parameters of the economy are slowing down. "The car sales numbers showed a slowdown, credit growth is tepid, and there is a slowdown in the consumer good side as well. There is stress developing across sectors, so one needs to be careful while giving credit out," he said.
With regards to the budgetary announcement, he said, "The bank has been buying non-banking financial company-pooled portfolios for the longest period and it is not something they would be doing because the Budget has talked about it. We will continue to evaluate and if right pools are available and if it comes at the right price, with the right kind of credit risk, we will look at buying it."
"As far as the Budget is concerned, it has given clear signals in terms of what the government expects to see on the NBFCs side. We are hoping that it could lead to demand coming back. The Finance Minister has painted a vision and has backed that vision with some measures that will be rolled out over a period of time," he said.
He added that it is a great vision which maintains fiscal prudence at the same time.
"So now it is all about execution and that partly has to do with the government and partly do with all the entrepreneurs and people like us to ensure that that vision is met," said Chaudhry.
Source: CNBC-TV18The Great Diwali Discount!
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